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Imports, Entry and Competition Law as Market Disciplines

  • Hoekman, Bernard
  • Kee, Hiau Looi

Since the early 1990s, numerous countries have adopted or strengthened competition legislation. In this Paper we investigate the impact of competition law on industry markups over time and across a large number of countries. We 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. Once allowance is made for the endogeneity of both domestic competition (number of firms) and the adoption of a competition law, however, we find that competition laws have an indirect effect on equilibrium markups by promoting a larger number of domestic firms.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3777.

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Date of creation: Feb 2003
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Handle: RePEc:cpr:ceprdp:3777
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