Economics - Various Essay Example | Topics and Well Written Essays - 750 words

Economics - Various - Essay Example In the case of negative externality, one of the best examples is the concern regarding pollution. Consider a manufacturing company operating of garments marketed to Europe based in Northern Thailand. The operation of the company releases contaminants in sewage which has been linked to the decline fisheries in the lower regions of the Mekong River. In this case, the operations of the company are not impacted directly or the buyers of the products affected by the issue. To illustrate a positive externality, consider the case of state or governments providing police to ensure and monitor public safety using tax revenues. Public safety is mainly in the interest of social or public welfare. This is provided by the government or the state to its citizens but also has the effect of increasing the competitiveness’ of markets and confidence of investors. Social stability encourages foreign direct investments and economic sustainability. Mergers are a means of corporate or operational expansion, generally mutually contracted, with the objective of increasing competencies, streamlining or to consolidate market interests or economies of scale for long term profitability. To contrast it from acquisition, acquisitions usually entail one company buying or gaining control of another company. Mergers are considered to be more â€Å"friendly† than acquisitions but are also considered to be more challenging since it requires compromising more parties or interests (Lien, 2005). Mergers are mainly classified as horizontal, vertical or conglomerate. Other classification of mergers include congeneric mergers, reverse mergers, accretive mergers and dilutive mergers but these have more limited use in research and are considered in general under the aforementioned main classifications. Horizontal mergers occur when the companies involved have similar products