Thank you for choosing Telerik Test Studio.
Basically your approach is correct and I suspect there are only some compilation errors occurred after you merged your elements. All these you could double check in the Output pane
which is available in Test Studio since its first release 2016.R1 this year. If you haven't upgraded I would recommend you to do so since there are lots of improvements and bug fixes in each new release. Otherwise such compilation errors will be available in your application log.
Additionally I would like to share an article with you which might be of great help for you - it describes the usage of BaseURL
across a project.
Please let me know if further assistance would be required.
Telerik by Progress