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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.

Suggested Citation

  • Joseph Clougherty & Anming Zhang, 2005. "Export orientation and domestic merger policy: theory and some empirical evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 38(3), pages 778-806, August.
  • Handle: RePEc:cje:issued:v:38:y:2005:i:3:p:778-806
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    Citations

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    Cited by:

    1. Joseph Clougherty, 2010. "Competition Policy Trends and Economic Growth: Cross-National Empirical Evidence," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 17(1), pages 111-127.
    2. repec:eee:inecon:v:107:y:2017:i:c:p:147-164 is not listed on IDEAS
    3. Marina Tsygankova, "undated". "The Export of Russian Gas to Europe: Breaking Up the Monopoly of Gazprom," Energy and Environmental Modeling 2007 24000062, EcoMod.
    4. Ohashi, Hiroshi & Toyama, Yuta, 2017. "The effects of domestic merger on exports: A case study of the 1998 Korean automobile industry," Journal of International Economics, Elsevier, vol. 107(C), pages 147-164.
    5. Joseph A. Clougherty & Anming Zhang, 2009. "Domestic rivalry and export performance: theory and evidence from international airline markets," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 440-468, May.
    6. Marjit, Sugata & Ray, Moushakhi, 2017. "Export profitability, competition and technology," International Review of Economics & Finance, Elsevier, vol. 47(C), pages 35-45.
    7. 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.

    More about this item

    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • F10 - International Economics - - Trade - - - General

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