Trade Openness and Antitrust Law*

Abstract. Openness to international trade and adopting stringent antitrust laws are both ways that countries can curb anticompetitive behavior. But scholars have long debated the relationship between these two tools. Some have argued that greater trade openness makes antitrust unnecessary, while others have argued that antitrust laws are still needed to realize the benefits of trade liberalization. But data limitations have made this debate largely theoretical. In this paper, we study the relationship between trade and antitrust empirically. To do so, we introduce the most comprehensive data on antitrust polices yet collected and extend recent research to develop an exogenous measure of trade openness for each year in the postwar period. We find that trade openness and antitrust stringency are consistently positively correlated, and that the relationship is largely statistically significant. Our results thus suggest that countries that are more open to trade also adopt more stringent antitrust laws.