Abstract

Openness to trades can intensify competition in a country and confine the possibilities of rent creation and extraction. Mergers and acquisitions introduce competition in the markets and bring not only capital and technologies, but also new norms and policies. This study examines to what extend openness to trades and competition intensification through M&A could affect the level of corruption in a country. Our study focuses on the effect of M&A activity (as a proxy for openness to trades) on corruption levels. Using a large panel of 50 countries over a 16-year period, we find evidence that openness to trades helps countries reduce their level of corruption.

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