Study on Welfare Effect of Large Corporations' MA of Substitute Producers

摘要

With the coming of post equity division reform, active M&A and its consequences aroused more concerned among scholars and policy makers. Generally we evaluate M&A performance from both macro and micro aspect. The macroscopic performance evaluation is mainly conducted from the aspect of its effect on the whole society. This paper adopts the expanded classical Williamson's model to analyze the large enterprises' M&A in the substitutes markets and its impact on social net welfare. The actions of large scaled corporations in the substitutes market aims not only at entering the market, but for certain market control power. When the corporation wins the control in target market, it enables them to exercise controlling power by raising the price, which might affect demand of the original product market, and shift demand curve of the previous products upwards to the right, thus affect level of the net social welfare.