Trade liberalization and industrial restructuring through mergers and acquisitions

Holger Breinlich

Journal of International Economics, 2008, vol. 76, issue 2, 254-266

Abstract: This paper analyzes mergers and acquisitions (M&As) as a channel of industrial restructuring after trade liberalization. Using the Canada-United States Free Trade Agreement (CUSFTA) of 1989 as a source of exogenous variation in trade barriers, I show that trade liberalization increased domestic Canadian M&A activity (Canadian firms buying other Canadian firms) by over 70%. There is no robust link between tariff reductions and either domestic U.S. or cross-border M&As. I also provide evidence that domestic M&As transferred resources from less to more productive firms and that the magnitude of the overall transfer was quantitatively important.

Keywords: Mergers; and; acquisitions; Trade; liberalization; Restructuring; International; trade; Canada-United; States; Free; Trade; Agreement (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (88)

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Related works:
Working Paper: Trade Liberalization and Industrial Restructuring through Mergers and Acquisitions (2006)
Working Paper: Trade liberalization and industrial restructuring through mergers and acquisitions (2006)
Working Paper: Trade Liberalization and Industrial Restructuring through Mergers and Acquisitions (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:76:y:2008:i:2:p:254-266

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