Mergers, Foreign Competition, and Jobs: Evidence from the US Appliance Industry
American Economic Review · 2026 · Volume 116 · Issue 6
Abstract
Policy choices often create trade-offs between workers and consumers. I examine how foreign competition alters the consumer welfare and domestic employment effects of mergers. I construct a model incorporating consumer demand, endogenous product portfolios, and employment decisions. Applying the model to Whirlpool's acquisition of Maytag in the appliance industry, I compare the observed merger to a counterfactual acquisition by a foreign buyer. Although Whirlpool's acquisition decreased consumer welfare by $271 million annually, it preserved 797 domestic jobs. These jobs must therefore be valued at more than $344,000 per year for the domestic employment benefits to offset the consumer harm.
Keywords
Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital, Aggregate Labor Productivity, Multinational Firms, International Business, Mergers, Acquisitions, Restructuring, Voting, Proxy Contests, Corporate Governance, Compensation, and Labor Costs: General, Oligopoly and Other Imperfect Markets, Appliances, Furniture, Other Consumer Durables, Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration, Regional Labor Markets, Population, Neighborhood Characteristics
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