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

Joseph A. Clougherty, Anming Zhang

Research output: Contribution to journalReview articlepeer-review


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.

Original languageEnglish (US)
Pages (from-to)778-806
Number of pages29
JournalCanadian Journal of Economics
Issue number3
StatePublished - Aug 2005
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics


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