Does More Intense Competition Lead to Higher Growth?

29 Pages Posted: 20 Apr 2016

See all articles by Aydin Hayri

Aydin Hayri

University of Warwick - Department of Economics

Mark Dutz

European Bank for Reconstruction and Development (EBRD)

Date Written: Noveember 30, 1999

Abstract

Empirical evidence indicates a strong correlation between long-run growth and effective enforcement of antitrust and competition policy. The relationship between the intensity of competition in an economy and its long-run growth is an open question in economics. Theoretically, there is no clear-cut answer.

Empirical evidence exists, however, that in some sectors more competition leads to more innovation and accelerates productivity growth. To complement those findings and capture economywide effects, Dutz and Hayri conduct a cross-country study. They examine the impact on growth of various measures having to do with intensity of domestic competition - beyond the effects of trade liberalization.

Their results indicate a strong correlation between long-run growth and effective enforcement of antitrust and competition policy.

An earlier version of this paper - a product of Public Economics, Development Research Group - was presented at a conference, Industrial Reorganization and Development, in Toulouse, France (November 1998). The study was funded by the Bank's Research Support Budget under the research project Does More Intense Competition Lead to Higher Growth? (RPO 682-47). The authors may be contacted at mdutz@worldbank.org or ahayri@dttus.com

Suggested Citation

Hayri, Aydin and Dutz, Mark, Does More Intense Competition Lead to Higher Growth? (Noveember 30, 1999). Available at SSRN: https://ssrn.com/abstract=630693

Aydin Hayri (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

Mark Dutz

European Bank for Reconstruction and Development (EBRD) ( email )

One Exchange Square
London, EC2A 2EH
United Kingdom
+44 171 338 6000 (Phone)
+44 171 338 6100 (Fax)

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