Imports, Entry and Competition Law as Market Disciplines
Robert Schuman Centre for Advanced Studies; Centre for Economic Policy Research (CEPR)
Hiau Looi Kee
World Bank - Development Research Group (DECRG)
CEPR Discussion Paper No. 3777
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.
Number of Pages in PDF File: 32
Keywords: Competition law, import penetration, domestic entry, industry markup
JEL Classification: F12, F13, L11working papers series
Date posted: April 3, 2003
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