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Merger Policy in a Quantitative Model of International Trade

Author

Listed:
  • Holger Breinlichy

    (University of Surrey, CEP and CEPR)

  • Volker Nockez

    (University of Mannheim, NBER and CEPR)

  • Nicolas Schutzx

    (University of Mannheim and CEPR)

Abstract

In a two-country international trade model with oligopolistic competition, we study the conditions on market structure and trade costs under which a merger policy designed to bene t domestic consumers is too tough or too lenient from the viewpoint of the foreign country. We calibrate the model to match industry-level data in the U.S. and Canada. Our results suggest that at present levels of trade costs, merger policy is too tough in the vast majority of sectors. We also quantify the resulting externalities and study the impact of di erent regimes of coordinating merger policies at varying levels of trade costs.

Suggested Citation

  • Holger Breinlichy & Volker Nockez & Nicolas Schutzx, 2018. "Merger Policy in a Quantitative Model of International Trade," School of Economics Discussion Papers 0818, School of Economics, University of Surrey.
    • Handle: RePEc:sur:surrec:0818
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    File URL: https://repec.som.surrey.ac.uk/2018/DP08-18.pdf
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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations

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