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Imports, entry and competition law as market disciplines

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  • Kee, Hiau Looi
  • Hoekman, Bernard

Abstract

Since the early 1990s numerous countries have adopted or strengthened competition legislation. Kee and Hoekman investigate the impact of competition law on industry markups over time and across a large number of countries. They find both domestic and foreign competition to be major sources of market discipline in concentrated markets, but that the direct effect of competition law is insignificant. However, once allowance is made for the endogeneity of both domestic competiton (number of firms) and the adoption of a competition law, the authors find that competition laws have an indirect effect on equilibrium markups by promoting a larger number of domestic firms.
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Suggested Citation

  • Kee, Hiau Looi & Hoekman, Bernard, 2007. "Imports, entry and competition law as market disciplines," European Economic Review, Elsevier, vol. 51(4), pages 831-858, May.
  • Handle: RePEc:eee:eecrev:v:51:y:2007:i:4:p:831-858
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Rajabiun Reza, 2009. "Competition Law as Development Policy: Evidence from Poland," The Law and Development Review, De Gruyter, vol. 2(1), pages 116-150, August.
    2. Filip Abraham & Jozef Konings & Stijn Vanormelingen, 2006. "Price and wage setting in an integrating Europe : firm level evidence," Working Paper Research 93, National Bank of Belgium.
    3. Klaus S. Friesenbichler, 2014. "EU Accession, Domestic Market Competition and Total Factor Productivity. Firm Level Evidence," WIFO Working Papers 492, WIFO.
    4. Lewis Evans and Patrick Hughes, 2003. "Competition Policy in Small Distant Open Economies: Some Lessons from the Economics Literature," Treasury Working Paper Series 03/31, New Zealand Treasury.
    5. Bekkers, Eddy & Francois, Joseph, 2013. "Trade and industrial structure with large firms and heterogeneity," European Economic Review, Elsevier, pages 69-90.
    6. Rosen Marinov, 2010. "Competitive Pressure in Transition: A Role for Trade and Competition Policies?," Journal of Industry, Competition and Trade, Springer, vol. 10(1), pages 1-31, March.
    7. Blonigen, Bruce A. & Liebman, Benjamin H. & Pierce, Justin R. & Wilson, Wesley W., 2013. "Are all trade protection policies created equal? Empirical evidence for nonequivalent market power effects of tariffs and quotas," Journal of International Economics, Elsevier, pages 369-378.
    8. Hervé Boulhol & Sabien Dobbelaere & Sara Maioli, 2011. "Imports as Product and Labour Market Discipline," British Journal of Industrial Relations, London School of Economics, vol. 49(2), pages 331-361, June.
    9. Bernard Hoekman, 2004. "Policies Facilitating Firm Adjustment to Globalization," Oxford Review of Economic Policy, Oxford University Press, vol. 20(3), pages 457-473, Autumn.
    10. Cassey Lee, 2007. "Legal Traditions and Competition Policy," Chapters,in: Competitive Advantage and Competition Policy in Developing Countries, chapter 4 Edward Elgar Publishing.
    11. Patrick McCloughan & Seán Lyons & William Batt, 2007. "The Effectiveness of Competition Policy and the Price-Cost Margin: Evidence from Panel Data," Papers WP209, Economic and Social Research Institute (ESRI).
    12. Jo Seldeslachts & Joseph A. Clougherty & Pedro Pita Barros, 2009. "Settle for Now but Block for Tomorrow: The Deterrence Effects of Merger Policy Tools," Journal of Law and Economics, University of Chicago Press, vol. 52(3), pages 607-634, August.
    13. Clarke, George R. G., 2005. "Do government policies that promote competition encourage or discourage new product and process development in low and middle-income countries?," Policy Research Working Paper Series 3471, The World Bank.
    14. repec:euf:qreuro:0112-03 is not listed on IDEAS
    15. Hervé Boulhol, 2005. "Why haven't price-cost margins decreased with globalization ?," Cahiers de la Maison des Sciences Economiques bla06007, Université Panthéon-Sorbonne (Paris 1).
    16. repec:oup:jcomle:v:9:y:2013:i:3:p:593-636. is not listed on IDEAS

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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