Competition, Competitiveness and Growth in Sub-Saharan Africa

49 Pages Posted: 12 Mar 2020

See all articles by Reda Cherif

Reda Cherif

International Monetary Fund (IMF)

Sandesh Dhungana

International Monetary Fund (IMF)

Xiangming Fang

International Monetary Fund (IMF)

Jesus Gonzalez-Garcia

International Monetary Fund (IMF)

Miguel Mendes

World Bank - International Finance Corporation (IFC)

Yuanchen Yang

International Monetary Fund

Mustafa Yenice

International Monetary Fund (IMF)

Jung Eun Yoon

International Monetary Fund (IMF)

Date Written: February 2020

Abstract

Does greater product market competition improve external competitiveness and growth? This paper examines this question by using country-and firm-level data for a sample of 39 sub-Saharan African countries over 2000-17, as well as other emerging market economies and developing countries, and finds that an improvement in domestic competition is associated with a signficant increase in real GDP per capita growth rate, achieved mainly through an improvement in export competitiveness and productivity growth. Price levels, including of essential items, are also generally lowered with an increase in competition. Moreover, at the firm-level, evidence shows that greater competition-proxied through a decline in corporate market power-is associated with an increase in firm's investment and the labor's share in output. These effects are more pronounced in the manufacturing sector and among domestic firms compared to foreign firms.

Keywords: Economic integration, Trade policy, Global competitiveness, Total factor productivity, International trade agreements, Markups, Market Power, Competition, Sub-Saharan Africa, WP, sub-Saharan African country, markup, sub-Saharan, effect of competition, emerge market economy

JEL Classification: D20, D4, E2, F6, J3, K2, L1, L4, E01, F15, F16, O4

Suggested Citation

Cherif, Reda and Dhungana, Sandesh and Fang, Xiangming and Gonzalez-Garcia, Jesus and Mendes, Miguel and Yang, Yuanchen and Yenice, Mustafa and Eun Yoon, Jung, Competition, Competitiveness and Growth in Sub-Saharan Africa (February 2020). IMF Working Paper No. 20/30, Available at SSRN: https://ssrn.com/abstract=3553187

Reda Cherif (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Sandesh Dhungana

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Xiangming Fang

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Jesus Gonzalez-Garcia

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Room: HQ2 10A-572
Washington, DC 20431
United States
(202) 6236310 (Phone)
(202) 6236159 (Fax)

Miguel Mendes

World Bank - International Finance Corporation (IFC) ( email )

2121 Pennsylvania Avenue, NW
Washington, DC 20433
United States

Yuanchen Yang

International Monetary Fund ( email )

United States

Mustafa Yenice

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Jung Eun Yoon

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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