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Competition And Competition Policy In Emerging Markets: International And Developmental Dimensions

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  • Ajit SINGH

Abstract

This paper examines the role of competition policy in emerging markets from a developmental and international perspective. The main issues addressed include the following: The state of competition and competition policy in developing countries; The relationship between competition, competition policy and economic development; The implications of the recent new advances in the theory of industrial organization for competition policy; The current international merger wave and its impact on developing countries. Multilateral competition policy and the establishment of an International Competition Authority (ICA). The paper´s main conclusions include the following: Contrary to conventional wisdom, many different kinds of evidence suggest that the intensity of competition in leading emerging markets is certainly no less, if not greater, than that observed in advanced countries. Analysis and evidence indicates that maximum competition is not necessarily optimal, in terms of dynamic efficiency, i.e. maximization of an economy´s long-term productivity growth. Even if it was not required in the past, developing countries need a competition policy today, because of the huge international merger movement as well as privatization and deregulation in these economies themselves. There is little evidence to indicate that the current international merger wave will enhance global economic efficiency. Giant cross-border mergers, as well as those occurring between large firms within advanced countries, could, however, adversely affect competition and contestability in developing countries and the world economy. Even with competition policies, developing countries may not be able to restrain anti-competitive behaviour by large multinationals.The current competition policies in the United States and the European Union are unsuitable for developing countries. Countries at different levels of development and governance capacities require different types of competition policies. A good model for many emerging countries with effective governance structures is that of the Japanese competition policy during 1950-73. The Japanese used both competition and cooperation to promote rapid industrialization. The paper presents a proposal for a development-oriented international competition authority to control anti-competitive conduct and growth by mergers of large multi-nationals. It is argued here that the current discourse on the development dimension of competition policy at the WTO is unsatisfactory; its terms and language need to be radically changed. The ultimate aim of the WTO should not be to promote free trade for its own sake, but to achieve economic development

Suggested Citation

  • Ajit SINGH, 2002. "Competition And Competition Policy In Emerging Markets: International And Developmental Dimensions," G-24 Discussion Papers 18, United Nations Conference on Trade and Development.
  • Handle: RePEc:unc:g24pap:18
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    References listed on IDEAS

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    Cited by:

    1. Aldaba, Rafaelita M., 2008. "Emerging Issues in Promoting Competition Policy in the APEC and ASEAN Countries," Discussion Papers DP 2008-02 (revised), Philippine Institute for Development Studies.
    2. Ajit Singh, 2006. "Competition and Competition Policy in Emerging Markets: International and Developmental Dimensions," Chapters,in: Growth and Economic Development, chapter 12 Edward Elgar Publishing.
    3. Uchida, Yuichiro & Cook, Paul, 2004. "The Effects of Competition on Technological and Trade Competitiveness: A Preliminary Examination," Centre on Regulation and Competition (CRC) Working papers 30654, University of Manchester, Institute for Development Policy and Management (IDPM).
    4. A. Vindelyn Smith-Hillman, 2007. "Competition policy, inflation and corruption: evidence from African economies," Applied Economics Letters, Taylor & Francis Journals, vol. 14(9), pages 653-656.
    5. Babool, Md. Ashfaqul Islam & Reed, Michael R. & Mikic, Mia & Saghaian, Sayed H., 2007. "The Impact of Competition Policy on Production and Export Competitiveness: A Perspective from Agri-food Processing," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34824, Southern Agricultural Economics Association.
    6. Budzinski, Oliver & Haji Ali Beigi, Maryam, 2013. "Competition policy agendas for industrializing countries," Ilmenau Economics Discussion Papers 81, Ilmenau University of Technology, Institute of Economics.
    7. Ajit Singh, 2003. "Competition, corporate governance and selection in emerging markets," Economic Journal, Royal Economic Society, vol. 113(491), pages 443-464, November.
    8. Jack Glen & Kevin Lee & Ajit Singh, 2003. "Corporate profitability and the dynamics of competition in emerging markets: a time series analysis," Economic Journal, Royal Economic Society, vol. 113(491), pages 465-484, November.
    9. Cassey Lee, 2007. "Legal Traditions and Competition Policy," Chapters,in: Competitive Advantage and Competition Policy in Developing Countries, chapter 4 Edward Elgar Publishing.
    10. Metcalfe, John S. & Ramlogan, Ronnie & Uyarra, E., 2002. "Economic Development and the Competitive Process," Centre on Regulation and Competition (CRC) Working papers 30612, University of Manchester, Institute for Development Policy and Management (IDPM).
    11. Andrew MOLD, 2004. "Fdi And Poverty Reduction: A Critical Reappraisal Of The Arguments," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 20, pages 91-122.
    12. Rod Falvey & Annamaria La Chimia & Oliver Morrissey & Evious Zgovu, "undated". "Competition Policy and Public Procurement in Developing Countries," Discussion Papers 08/07, University of Nottingham, CREDIT.
    13. Grajzl, Peter & Baniak, Andrzej, 2009. "Industry self-regulation, subversion of public institutions, and social control of torts," International Review of Law and Economics, Elsevier, vol. 29(4), pages 360-374, December.
    14. Zhang, Jianhong & He, Xinming, 2014. "Economic nationalism and foreign acquisition completion: The case of China," International Business Review, Elsevier, vol. 23(1), pages 212-227.

    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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