Trade Liberalization and the Profitability of Mergers: a Global Analysis*

We analyze the effects of bilateral tariff reductions on the profitability of cost‐reducing horizontal mergers. Given Cournot competition in a two‐country world, for any positive tariff below a certain threshold, marginal trade liberalization is shown to encourage only those domestic mergers with sufficiently large cost‐savings and to discourage the rest. For tariffs close to, but smaller than, the prohibitive tariff, however, marginal trade liberalization necessarily encourages all domestic mergers. Moreover, we show that for a given level of cost‐savings, the impact of marginal trade liberalization may not reliably predict that of nonmarginal liberalization. Although at high tariffs, domestic mergers are shown to be unambiguously more profitable than cross‐border mergers, near free trade, mergers which yield the most cost‐savings become the most profitable. Thus, when comparing domestic and cross‐border mergers, trade liberalization encourages the type which yields the most cost‐savings.     

Welfare Effect of Mergers and Multilateral Trade Liberalization

In a two‐country model where firms behave à la Cournot, we show that trade liberalization increases (decreases) the social desirability of those mergers that generate sufficiently large (small) reductions in marginal cost. There exists a range of intermediate levels of marginal cost savings such that marginal tariff reductions increase (decrease) the desirability of merger at sufficiently low (high) tariff levels. Moreover, in the neighborhood of free trade, we show that if trade liberalization increases the profitability of a merger, it necessarily also increases its desirability.     

The Effects of Trade Liberalization On Cost-Reducing Horizontal Mergers*

This paper analyzes the effects of tariff reductions on horizontal mergers in a Cournot oligopoly in a two-country world. It is shown that for mergers between two domestic firms and for cross-border mergers which supply both markets from a foreign plant, unilateral tariff reduction encourages mergers which concentrate market power at the expense of mergers which reduce cost, while bilateral tariff reductions have the opposite effect, encouraging mergers which significantly reduce cost. Cross-border mergers which continue to supply each market from a local plant are discouraged by both unilateral and bilateral tariff reduction.     

The Effects of Trade Liberalization between Heterogeneous Countries on Endogenous Mergers

This paper examines the effects of trade liberalization on merger behavior. We endogenize merger choice among owners in an oligopolistic industry in asymmetric countries to analyze the consequences of trade cost reductions on competitiveness and welfare. In this context, the non‐cooperative game supports asymmetric market structures. We also find that trade liberalization is not necessarily pro‐competitive in countries with the competitive advantage, even if trade costs are completely abolished. Moreover, the tariff‐jumping explanation of international mergers does not necessarily apply. The welfare analysis shows that merger behavior can significantly alter any gains from liberalization. Countries should consider enforcing competition in regional agreements. Specifically, to avoid a reduction in domestic welfare following trade‐liberalizing reductions in trade costs, a high‐cost country's optimal policy may be to ban international mergers.     

进口自由化与企业利润率

本文研究了最终品进口自由化对本国纯内销企业利润率的影响。短期均衡时,最终品进口自由化使得更多外国企业向本国市场出口,加剧了本国产品市场的竞争,降低了本国纯内销企业的利润率。而在长期,由于企业能够充分进入和退出市场,一部分本国企业会退出市场,均衡时留下来的企业利润率升高。本文首先通过理论模型解释了上述现象,随后利用我国2000—2007年规模以上制造业企业层面的面板数据进行了实证检验,验证了进口自由化对企业利润率影响的渠道。实证结果发现,中间品关税下降会对本国纯内销企业的利润率产生正向影响。最后,理论模型和实证结果还证明了,其他条件相同时,企业的生产率越高,其利润率越高。     

Merger Profitability and Trade Policy

We study the profitability incentives for merger and the endogenous industry structure in a strategic trade policy environment. Merger changes the strategic trade policy equlilibrium. We show that merger can be profitable and welfare enhancing, even though it would not be profitable in a laissez‐faire economy. A key element is a change in the governments’ incentives to give subsidies to their local firms. National merger induces more strategic trade policy, whereas international merger does not.     

Revenue Motives and Trade Liberalization

Governments in more-developed economies partially compensate import-competing industries when world prices fall, i.e., they lean against the wind. Less-developed economies often liberalize in response to the same shock. We use a political-support maximization model with revenue motives to derive conditions under which a rational policymaker would respond to lower woild prices by reducing tariff protection for an import-competing industry. An initial tariff that exceeds the maximum revenue level proves necessary but not sufficient for politically optimal liberalization following a fall in the world price of the importable good.     

Endogenous Growth and Trade Liberalization

We develop an endogenous growth model in which trade liberalization has a positive effect on growth. This effect does not depend on marginal re-allocations nor on knowledge-spillovers. Rather, it is due solely to the increase in market size following the integration of product markets. Our result contradicts a widely-help view that trade on physical goodsper sehas no consequences for long-run growth.[F15]     

Trade Liberalization and Cartel Stability

Can reduced trade barriers promote a collusive understanding about not exporting into each others domestic markets? Reduced trade costs increase the short‐run gains from starting exporting, but can also make the long‐run punishment of such a strategy harsher. If collusion on prices is supported by a trigger strategy, a reduction in trade costs weakens competition in the sense that collusion is easier to sustain. In a corresponding model with collusion on quantities, this conclusion is reversed. The authors also discuss how results change if grim trigger strategies are replaced by stick‐and‐carrot punishments.     

Trade Liberalization and Technology Diffusion

The paper considers the role of technology diffusion and trade liberalization for the catching‐up of structurally backward countries. A New Economic Geography model is presented that accounts for firm entry/exit and international mobility of skilled labor employed in public R&D sectors. This raises the traditional agglomeration effects in a core–periphery setting as firms and mobile factors usually cluster within spatial agglomerations. With international technology diffusion, however, there is a counteracting effect on the traditional agglomeration effects as firms in the periphery also benefit from increasing R&D expenditures in the core lowering entry costs for firms. It is found that the catching‐up of structurally backward countries is spurred not only as a result of trade integration but also because of technology diffusion.     

Trade Liberalization and Technology Choice

This paper considers the links between trade liberalization and technology choice in the nonliberalizing country. Trade‐liberalization‐induced changes in relative product prices have direct effects on equilibrium relative factor returns. The consequent changes in relative input costs may also lead producers to switch to alternative technologies, which will in turn induce a further indirect change in relative factor returns. Will this indirect affect exacerbate or ameliorate the direct effect on relative factor returns? It is found that this depends on the relative cost savings across sectors and factor cost shares.     

Child Labour and Trade Liberalization

The paper analyses the implications of trade liberalization on the incidence of child labour in a two-sector general equilibrium framework. The supply function of child labour has been derived from the utility-maximizing behaviour of the working families. The paper finds that the effect of trade liberalization on the incidence of child labour crucially hinges on the relative factor intensities of the two sectors.     

Trade Liberalization and Productivity Growth

This paper presents a trade model with firm‐level productivity differences and R&D‐driven growth. Trade liberalization causes the least productive firms to exit but also slows the development of new products. The overall effect on productivity growth depends on the size of intertemporal knowledge spillovers in R&D. When these spillovers are relatively weak, then trade liberalization promotes productivity growth in the short run and makes consumers better off in the long run. However, when these spillovers are relatively strong, then trade liberalization retards productivity growth in the short run and makes consumers worse off in the long run.     

Trade Liberalization in Egypt

A computable general equilibrium model of Egypt is developed to analyze proposed reforms in its trade policies, including a partnership agreement with the European Union. The model has multiple trading regions and allows for administrative trade barriers and tariffs. The paper reports computations of the revenue impacts of trade liberalization and the required changes in distortionary commodity taxes to maintain a fixed real government budget. Egypt's greatest potential gains come from removing its administrative trade barriers while adopting globally free trade. The partnership agreement with the EU could lower or raise Egypt's welfare, depending on prior trade reform.     

Mergers and Trade Policy under Oligopoly

For an oligopolistic industry, the effects of mergers on the domestic country's optimal trade policy are analyzed. If the domestic country pursues an optimal trade policy then it will always lose as a result of a foreign merger. The optimal domestic response to a foreign merger is to decrease (increase) the tariff if demand is concave (convex) and to increase the production subsidy. The foreign merger reduces foreign welfare when the domestic country pursues its optimal trade policy. The optimal domestic response to a domestic merger is to leave the tariff unchanged and to increase the production subsidy.     

Trade Liberalization and Heterogeneous Technology Investments

We propose a trade model where heterogeneous firms decide on a productivity‐enhancing technology investment. The model analyzes the impact of multilateral trade liberalization on firm‐ and industry‐level productivity. Freer trade increases the incentives to invest in technology by raising export profits. It also dampens these incentives, however, as profits stemming from domestic sales are reduced. Only exporters benefit from the former positive effect. The shape of the distribution of efficiency draws, the level of trade costs and the technology intensity of the industry are key elements removing the ambiguities regarding the net impact of trade liberalization.     

市场结构，贸易自由化和GATS

原载:European Journal0f Political Economy Vol.595(2001)[《欧洲政治经济学杂志》2001年第595卷]一、概述自建立以来,多边贸易体系一直只关注货物贸易。因此,从1947到东京回合,服务在历次的贸易谈判中都未曾提及。乌拉圭回合及其后世界贸易组织的成立,改变了这种状况。通过服务贸易总协定(GATS),他们将服务引进并纳入到多边贸易体系中。然而,实际的自由化程度一直相对较低,GATS的许多减让表还只是简单地停留在承诺上(或者连承诺都谈不上)。所以人们普遍认为服务部门的自由化仍有很大的发展空间。本文关心的是服务部门自由化的解析…     

论异质性厂商下的贸易自由化

1．引言近十年的经验研究表明,标准的新贸易理论对于同质厂商的假设忽略了许多现实的重要因素。例如,并非所有的厂商都在贸易部门进行贸易,而且同一部门内的出口厂商的生产力一般要高于该部门的非出口厂商(A．W,Chung和Roberts 2000,Bernard和Jensen 1995,1999a,b,2001；Clerides,Lach和Tybout 1998；Eaton,Kortum和Kramarz 2004；参见Tybout 2003 for a survey)。     

Cross-Country Externalities of Trade and FDI Liberalization

We develop a three-country heterogeneous-firm model and show that FDI liberalization in one foreign country (F1) results in the following: (i) some firms from the home country switch from export to FDI in F1; (ii) skilled labor’s wage rate drops in the home country; (iii) wage inequality between the skilled and unskilled labor decreases; and (iv) some firms from the home country switch from FDI to export to another foreign country (F2). The effects from trade liberalization are just the opposite, but the effects from education improvement are qualitatively the same as FDI liberalization. The cross-country externalities work through the domestic labor market.