Mergers, Foreign Competition, and Jobs: Evidence from the U.S. Appliance Industry

Montag, Felix (9. August 2023): Mergers, Foreign Competition, and Jobs: Evidence from the U.S. Appliance Industry. Collaborative Research Center Transregio 190, Discussion Paper No. 413

Abstract

Policy choices often entail trade-offs between workers and consumers. I assess how foreign competition changes the consumer welfare and domestic employment effects of a merger. I construct a model accounting for demand responses, endogenous product portfolios, and employment. I apply this model to the acquisition of Maytag by Whirlpool in the household appliance industry. I compare the observed acquisition to one with a foreign buyer. While a Whirlpool acquisition decreased consumer welfare by $250 million, it led to 1,300 fewer domestic jobs lost. Jobs need to be worth above $220,000 annually for domestic employment effects to offset consumer harm.

• Dokumententyp: Paper
• Fakultät: Volkswirtschaft > Collaborative Research Center Transregio "Rationality and Competition"
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• JEL Classification: F61, L13, L40
• Sprache: Englisch
• DFG: Gefördert durch die Deutsche Forschungsgemeinschaft (DFG) - 280092119