IDEAS home Printed from https://ideas.repec.org/p/eab/tradew/22306.html
   My bibliography  Save this paper

The Impact of Market Reforms on Competition, Structure and Performance of the Philippine Economy

Author

Listed:
  • Rafaelita M. Aldaba

    (PIDS)

Abstract

The paper studies the impact of trade liberalization on competition and productivity. Competition is the main channel through which trade liberalization affects economic performance. Competition fosters innovation and technology adoption which leads to increases in competitiveness and growth that will have large consequences for poverty and inequality. To realize these expected effects, it is important that firms change their behavior and adjust to the new market environment. The success of reforms depends to a great extent on the capacity of firms to exploit the new competitive conditions in the market and on their ability to take advantage of the opportunities offered to them. Firms, however, will not venture into the unknown and uncertain. They will only take advantage of the new market opportunities if the government program for implementing policy reforms is a credible one. Policy reversals, delays in timetable, and inconsistent decision-making may undermine the success of liberalization. Hence, the overall environment for market transactions is also an essential ingredient. Therefore, the strength of competition is a function not only of the behavior of firms but also of the external environment within which they compete. This includes the state of transport and communications, framework of laws and regulations, effectiveness of the financial system in matching investment resources with entrepreneurial opportunities, as well as information available to consumers. The experience of the Philippine manufacturing sector shows that which despite liberalization, competition and productivity growth have remained weak due to inadequate physical and institutional infrastructure.

Suggested Citation

  • Rafaelita M. Aldaba, 2005. "The Impact of Market Reforms on Competition, Structure and Performance of the Philippine Economy," Trade Working Papers 22306, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:tradew:22306
    as

    Download full text from publisher

    File URL: http://www.eaber.org/node/22306
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Feenstra, Robert C., 1995. "Estimating the effects of trade policy," Handbook of International Economics,in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 30, pages 1553-1595 Elsevier.
    2. Domowitz, Ian & Hubbard, R Glenn & Petersen, Bruce C, 1988. "Market Structure and Cyclical Fluctuations in U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 55-66, February.
    3. Aldaba, Rafaelita M., 2003. "Regulatory Policies and Reforms in the Power and Downstream Oil Industries," Discussion Papers DP 2003-16, Philippine Institute for Development Studies.
    4. Nina Pavcnik, 2002. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," Review of Economic Studies, Oxford University Press, vol. 69(1), pages 245-276.
    5. Balisacan, Arsenio M. & Hill, Hal (ed.), 2003. "The Philippine Economy: Development, Policies, and Challenges," OUP Catalogue, Oxford University Press, number 9780195158984.
    6. Jozef Konings & Patrick Van Cayseele & Frederic Warzynski, 2005. "The Effects of Privatization and Competitive Pressure on Firms' Price-Cost Margins: Micro Evidence from Emerging Economies," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 124-134, February.
    7. de Dios, Loreli C., 1994. "A Review of the Remaining Import Restrictions," Research Paper Series RPS 1994-08, Philippine Institute for Development Studies.
    8. Erkan Erdem & James Tybout, 2003. "Trade Policy and Industrial Sector Responses: Using Evolutionary Models to Interpret the Evidence," NBER Working Papers 9947, National Bureau of Economic Research, Inc.
    9. Raul V. Fabella & Rafaelita M. Aldaba, 2004. "The regulatory environment of the energy industry in the Philippines," Chapters,in: Leading Issues in Competition, Regulation and Development, chapter 19 Edward Elgar Publishing.
    10. Emmanuel S. de Dios, 1986. "Protection, Concentration, and the Direction of Foreign Investments," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 23(1&2), pages 57-82, March & J.
    11. Lamberte, Mario B. & Manlagnit, Ma. Chelo V., 2004. "Evaluating the Impacts of Competition Policy Reforms on the Efficiency of Philippine Commercial Banks," Discussion Papers DP 2004-46, Philippine Institute for Development Studies.
    12. Siotis, Georges, 2003. "Competitive pressure and economic integration: an illustration for Spain, 1983-1996," International Journal of Industrial Organization, Elsevier, vol. 21(10), pages 1435-1459, December.
    13. Krishna, Pravin & Mitra, Devashish, 1998. "Trade liberalization, market discipline and productivity growth: new evidence from India," Journal of Development Economics, Elsevier, vol. 56(2), pages 447-462, August.
    14. Kim, Euysung, 2000. "Trade liberalization and productivity growth in Korean manufacturing industries: price protection, market power, and scale efficiency," Journal of Development Economics, Elsevier, vol. 62(1), pages 55-83, June.
    15. Rafaelita M. Aldaba, 2005. "Policy Reversals, Lobby Groups and Economic Distortions," Trade Working Papers 22312, East Asian Bureau of Economic Research.
    16. Hoekman, Bernard & Kee, Hiau Looi & Olarreaga, Marcelo, 2001. "Mark-ups, Entry Regulation and Trade: Does Country Size Matter?," CEPR Discussion Papers 2853, C.E.P.R. Discussion Papers.
    17. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Multiproduct Firms, Product Differentiation, and Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
    18. Fabella, Raul V., 2002. "The Regulatory Environment of the Energy Industry in the Philippines," Centre on Regulation and Competition (CRC) Working papers 30677, University of Manchester, Institute for Development Policy and Management (IDPM).
    19. repec:rus:hseeco:121626 is not listed on IDEAS
    20. James R. Tybout, 2001. "Plant- and Firm-Level Evidence on "New" Trade Theories," NBER Working Papers 8418, National Bureau of Economic Research, Inc.
    21. Llanto, Gilberto M., 2002. "Infrastructure Development: Experience and Policy Options for the Future," Discussion Papers DP 2002-26, Philippine Institute for Development Studies.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jeffrey G. Williamson & Emmanuel S. de Dios, 2014. "Has the Philippines forever lost its chance at industrialization?," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 51(2), pages 47-66, December.
    2. Larry Digal & Glory Dee Romo & Thomas Reardon, 2009. "The Transformation of Food Retail in the Philippines," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 6(2), pages 51-84, December.
    3. Rezitis, Anthony N. & Kalantizi, Maria A., 2012. "Investigating market structure of the Greek food and beverages manufacturing industry: A Hall-Roeger approach," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 13(1), January.
    4. Rezitis, Anthony N., 2010. "Evaluating the state of competition of the Greek banking industry," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 20(1), pages 68-90, February.
    5. Roehlano M. Briones, 2009. "Agricultural Diversification and the Fruits and Vegetables Sub-Sector : Policy Issues and Development Constraints in the Philippines," Development Economics Working Papers 22951, East Asian Bureau of Economic Research.
    6. David, Cristina C. & Intal, Ponciano & Balisacan, Arsenio M., 2007. "Distortions to Agricultural Incentives in the Philippines," Agricultural Distortions Working Paper 48477, World Bank.

    More about this item

    Keywords

    competition; Trade Liberalization; effective protection; Total Factor Productivity Growth;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • F10 - International Economics - - Trade - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:tradew:22306. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shiro Armstrong). General contact details of provider: http://edirc.repec.org/data/eaberau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.