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Does more intense competition lead to higher growth?

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  • Dutz, Mark A.
  • Hayri, Aydin

Abstract

The relationship between the intensity of competition in an economy and its long-run growth is an open question in economics. Theoretically, there is no clear-cut answer. Empirical evidence exists, however, that in some sectors more competition leads to more innovation, and accelerates productivity growth. To complement those findings, and capture economy-wide effects, the authors conduct a cross-country study. They examine the impact on growth of various measures having to do with intensity of domestic competition - beyond the effects of trade liberalization. Their results indicate a strong correlation between long-run growth, and effective enforcement of antitrust, and competition policy.

Suggested Citation

  • Dutz, Mark A. & Hayri, Aydin, 2000. "Does more intense competition lead to higher growth?," Policy Research Working Paper Series 2320, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2320
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    More about this item

    Keywords

    Environmental Economics&Policies; Economic Theory&Research; ICT Policy and Strategies; Labor Policies; Decentralization; Economic Theory&Research; Environmental Economics&Policies; ICT Policy and Strategies; Achieving Shared Growth; Governance Indicators;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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