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Imports, entry and competition law as market disciplines

  • Kee, Hiau Looi
  • Hoekman, Bernard

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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Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 51 (2007)
Issue (Month): 4 (May)
Pages: 831-858

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Handle: RePEc:eee:eecrev:v:51:y:2007:i:4:p:831-858
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  10. Bittlingmayer, George, 1985. "Did Antitrust Policy Cause the Great Merger Wave?," Journal of Law and Economics, University of Chicago Press, vol. 28(1), pages 77-118, April.
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  17. Simeon Djankov & Bernard Hoekman, 2000. "Market discipline and corporate efficiency: evidence from Bulgaria," Canadian Journal of Economics, Canadian Economics Association, vol. 33(1), pages 190-212, February.
  18. Hausman, Jerry A., 1983. "Specification and estimation of simultaneous equation models," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 1, chapter 7, pages 391-448 Elsevier.
  19. Levinsohn, J., 1991. "Testing the Imports-As-Market-Discipline Hypothesis," Working Papers 272, Research Seminar in International Economics, University of Michigan.
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