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Trade liberalization and competitive behavior: A note assessing the evidence and the public policy implications
Author(s) -
Globerman Steven
Publication year - 1990
Publication title -
journal of policy analysis and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.898
H-Index - 84
eISSN - 1520-6688
pISSN - 0276-8739
DOI - 10.2307/3325114
Subject(s) - economics , liberalization , free trade , public policy , commercial policy , international economics , international trade , public economics , business , market economy , economic growth
A strongly held piece of conventional wisdom is that liberalizing barriers to international trade stimulates increased competition, which, in tum, promotes lower domestic prices and increased efficiency. Against this background, competition policy authorities seem to be taking a relatively benign view of merger and acquisition activity that is presumed to be linked to trade liberalization. A stream of literature has recently emerged that raises questions about the magnitude and even the direction of the impact of trade liberalization on competition. This literature cautions against easing legislative restrictions on merger activity contingent on trade liberalization initiatives.