Term:
Rationalisation agreement
Definition:
A Rationalization agreement is an agreement (generally approved or authorized by government) between firms in an industry to close down inefficient plants, reduce excess capacity and realign production in order to increase overall industry efficiency and performance.
Domain:
Finance
Source:
Glossary of Industrial Organisation Economics and Competition Law, compiled by R. S. Khemani and D. M. Shapiro, commissioned by the Directorate for Financial, Fiscal and Enterprise Affairs, OECD, 1993
