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Does More Intense Competition Lead to Higher Growth?

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Listed author(s):
  • Dutz, Mark
  • Hayri, Aydin

Abstract

The relationship between the overall intensity of competition in an economy and its long-run growth is an open question in economics. Theoretically, there is no clear-cut answer. However, there exists empirical evidence that in some sectors more competition leads to more innovation and accelerates productivity growth. To complement these findings and capture economy-wide effects, we conduct a cross-country study. We examine the impact of intensity of domestic competition beyond trade liberalisation on growth. Our findings indicate that the effectiveness of antitrust and competition policy enforcement is positively associated with long-run growth.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2249.

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Date of creation: Oct 1999
Handle: RePEc:cpr:ceprdp:2249
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Keywords: Antitrust; Competition; Extreme Bounds Analysis; Growth;

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Find related papers by 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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