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


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 Whirlpool’s acquisition of Maytag in the household appliance industry. I compare the observed acquisition to a counterfactual one by a foreign buyer. While Whirlpool’s acquisition decreased consumer welfare by $230 million annually, it preserved 900 domestic jobs. Therefore, these jobs need to be worth above $260,000 annually for the domestic employment effects to offset the consumer harm.

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