Public Policy toward Corporations

Public Policy toward Corporations

Public Policy toward Corporations

Public Policy toward Corporations

Excerpt

The American economic system has entered perhaps one of the most turbulent periods of its history. Deregulation, foreign competition, and the increasing role of financial markets in the decisions of American corporations all pose major challenges to American industry.

Deregulation of American industry has been the centerpiece of the Reagan administration's economic policy. Banking, telecommunications, airlines, and trucking have been transformed as the result of legislation and public policy decisions in recent years. In most cases these decisions have been appropriate and correct, but they have triggered strong reactions from the affected industries and generated unintended stress.

Corporations in many industries are facing extreme competition from an increasingly aggressive, and successful, array of foreign industries. Market shares of some of the strongest U.S. firms have fallen, the trade deficit has risen to record levels, and increasingly economists and business leaders are questioned as to whether American industry, in its present environment, can compete with emerging industries in Europe and Asia.

The combination of stresses inherent in these forces and the increasing role of financial markets in firm decision processes have led to a major restructuring of American industry, including massive consolidation movements in some industries. This trend has been facilitated by an apparent relaxation of antitrust standards, especially regarding mergers. In other industries, subsidiaries of conglomerate firms have been spun off, sold, or liquidated. Finally, hostile takeovers and tender offers, encouraged by an increasingly sophisticated financial community, have led to great pressure on corporate management to keep profitability high.

This book contains original research papers addressed to the foregoing issues and related topics by experts in the field of public policy toward industry. It has three main sections: current policy toward antitrust enforcement, and antitrust law as an effective vehicle for controlling consolidations and . . .

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