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Export orientation and domestic merger policy: theory and some empirical evidence

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  • Joseph Clougherty
  • Anming Zhang

Abstract

Recent `open-economy industrial organization' literature finds export orientation enhances the weight of post-merger international competitive gains, favouring lenient domestic merger policy. However, mergers seldom generate the `significant synergies' supportive of international competitive gains. Since a joint-economies-of-production effect suggests domestic mergers tend to generate international competitive losses (not gains), export orientation favours strict (not lenient) domestic merger policy. We show how non-synergistic domestic mergers in the presence of international sales might reduce national welfare and incur stringent merger reviews. A panel data set of U.S. merger policy by manufacturing sector, 1990-2001, empirically supports export orientation, leading to strict merger policy.

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Bibliographic Info

Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 38 (2005)
Issue (Month): 3 (August)
Pages: 778-806

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Handle: RePEc:cje:issued:v:38:y:2005:i:3:p:778-806

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References

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Citations

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Cited by:
  1. Clougherty, Joseph A & Zhang, Anming, 2008. "Domestic Rivalry and Export Performance: Theory and Evidence from International Airline Markets," CEPR Discussion Papers 6871, C.E.P.R. Discussion Papers.
  2. Clougherty, Joseph A., 2009. "Competition Policy Trends and Economic Growth: Cross-National Empirical Evidence," CEPR Discussion Papers 7515, C.E.P.R. Discussion Papers.
  3. Tsygankova, Marina, 2012. "An evaluation of alternative scenarios for the Gazprom monopoly of Russian gas exports," Energy Economics, Elsevier, vol. 34(1), pages 153-161.

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