Trade Liberalization and the Profitability of Domestic Mergers.

It is often thought that a tariff reduction, by opening up the domestic market to foreign firms, should lessen the need for a policy aimed at discouraging domestic mergers. This implicitly assumes that the tariff in question is sufficiently high to prevent foreign firms from selling in the domestic market. However, not all tariffs are prohibitive, so that foreign firms may be present in the domestic market before it is abolished. Furthermore, even if the tariff is prohibitive, a merger of domestic firms may render it nonprohibitive, thus inviting foreign firms to penetrate the domestic market. In this paper, we show, using a simple example, that in the latter two cases, abolishing the tariff may in fact make the domestic merger more profitable. Hence, trade liberalization will not necessarily reduce the profitability of domestic mergers.

Contrairement à une certaine idée reçue, nous montrons que l'ouverture du marché domestique par l'abolition d'un tarif douanier ne va pas nécessairement rendre moins profitable les fusions domestiques. Cette idée suppose implicitement que le tarif en question est prohibitif avant son abolition et qu'il le demeure après une fusion. Or ce n'est souvent pas le cas. Nous montrons, à l'aide d'un exemple, que l'abolition du tarif pourrait, dans certains cas, rendre la fusion domestique plus profitable.