Merger, partial collusion and relocation

We set up a three-firm model of spatial competition to analyse how a merger affects the incentives for relocation, and conversely, how the possibility of relocation affects the profitability of the merger, particularly for the non-participating firm. The analysis is carried out for the assumptions of both mill pricing and price discrimination, and we also consider the case of partial collusion. For the case of mill pricing, a merger will generally induce the merger participants to relocate, but the direction of relocation is ambiguous, and dependent on the degree of convexity in the consumers’ transportation cost function. We also identify a set of parameter values for which the free-rider effect of a merger vanishes, implying that the possibility of relocation could solve the ‘merger paradox’, even in the absence of price discrimination.Spatial competition; Merger; Relocation; Partial collusion.

Do geese migrate domestically?: Evidence from the Chinese textile and apparel industry

The vast majority of empirical literature on “flying geese” examines industrial relocation across national boundaries, in particular in Asia. However, few studies have empirically tested whether this kind of “flying geese” pattern of industrial relocation has occurred domestically in a large country, provided that the regional difference is large enough. Using textile and apparel industry data for the period 1997–2008 in China, the paper shows that until 2004, the textile and apparel industry was still concentrated in the eastern region of China, but starting in 2005, the flying geese phenomenon of industrial relocation began to appear.industrial relocation, flying geese hypothesis, textile and apparel industry, labor-intensive industries,

On the Development Strategy of Countries of Intermediate size - An Analysis of Heterogenous Fims in a Multiregion Framework

This paper compares two policies: trade cost reduction and firm relocation cost reduction using a three-country version of a heterogeneous-firms economic geography model, where the three countries have different market (population) size. We show how the effects of the two policies differ, in particular, for the country of intermediate size. Unless the intermediate country is very small, it will gain industry when relocation costs are reduced, but lose industry when trade costs are reduced. The smallest country loses industry in both cases, but only experiences lower welfare in the case of lower relocation costs. Thus, the ranking of the policies from the point of view of the two small and intermediate countries tends to be the opposite.Agglomeration; firm heterogeneity; multi-country model; trade liberalisation; relocation costs

The effects of firm relocation on firm performance - A literature review

Approximately 6% of all firms in the Netherlands decide to relocate every year. Furthermore, the number of firms that has relocated increased dramatically over time. Relatively much is known about the (re)location decision itself. However, much less research focuses on the effects of relocation on the performance of firms. This is remarkable since the importance of the geographical and organizational position of a firm for firm performance, and especially innovation, has become more and more profound over time. The notion that no firm may function as an island on itself is accepted by and large and the importance of a firm’s geographical and organizational position is sometimes even described as exaggerated in the literature. It therefore seems logical to study the effects of changes in a firm’s position as a result of a relocation. Given the above this paper asks the question: What is known in the literature about the effects of firm relocation on the performance of firms? In order to answer this question, first an overview of the possible effects of firm relocation is given. Subsequently, a review of the available literature dealing with the effects of firm relocation is presented in order to make an inventory of the effects that have and have not been studied. It is argued that the scarce relocation literature that is available has an extremely narrow focus and largely neglects the importance of the geographical and organizational position of a firm and thereby might ignore important factors influencing the effects of firm relocation on firm performance.

Environmental Authority: Transformations and Relocations in Global Modernity = Autoridade ambiental: transformações e relocações na modernidade global

As a public good, the environment has traditionally been handled by public authorities. However, with globalization conventional state environmental authority is transformed, relocated and deterritorialized. New non-state environmental authorities emerge. This paper conceptualizes the shifts in and relocation of environmental authority structures and illustrates this with examples from the fields of certification and labeling and environmental partnerships. While relocation does take place, new environmental authority structures are often mixes of state and non-state authorities. The paper finally assesses these developments, reflecting on the conventional criticism of the poor environmental and democratic potentials of such new non-state environmental authoritie