Lending a Hand to the Invisible Hand? Assessing the Effects of Newly Enacted Competition Laws

27 Pages Posted: 9 Feb 2014

See all articles by Jerg Gutmann

Jerg Gutmann

University of Hamburg - Institute of Law and Economics

Stefan Voigt

University of Hamburg - Institute of Law & Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: February 8, 2014

Abstract

Far more than 100 countries have adopted competition laws. Their macro-economic consequences, however, are rarely dealt with. The few available studies inquiring into the macro-economic effects of competition laws mostly rely on subjective indicators and employ an inadequate instrumental variable approach. This paper adds to the literature by relying on objective macro-economic indicators and on a differences-in-differences approach. We find robust evidence that competition laws do enhance economic growth. In low-income countries this effect can be traced back to an increase in investment levels. Competition laws have, however, no significant effect on total factor productivity or foreign direct investment. Finally, corruption appears to be declining after the introduction of competition laws in low-income countries.

Keywords: Competition Law, Competition Policy, Economic Growth, Law and Economic Development, Corruption

JEL Classification: D40, H11, K21, L16, L40, O10

Suggested Citation

Gutmann, Jerg and Voigt, Stefan, Lending a Hand to the Invisible Hand? Assessing the Effects of Newly Enacted Competition Laws (February 8, 2014). Available at SSRN: https://ssrn.com/abstract=2392780 or http://dx.doi.org/10.2139/ssrn.2392780

Jerg Gutmann

University of Hamburg - Institute of Law and Economics ( email )

Johnsallee 35
Hamburg, 20148
Germany

Stefan Voigt (Contact Author)

University of Hamburg - Institute of Law & Economics ( email )

Johnsallee 35
Hamburg, 20148
Germany
+49-40-428385782 (Phone)
+49-40-428386794 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
459
rank
58,281
Abstract Views
1,789
PlumX Metrics