Assessing Competition Policy on Economic Development

  • Tilsa Oré University of Oklahoma
    PhD student at SUNY Stony Brook, MA in Applied Economics at the University of Oklahoma; MA in International trade and Economic Cooperation at the Kyung Hee University (South Korea); and BSc in Economics at the PUCP. This research paper has been elaborated under the supervision of PhD. Kevin Grier, professor of the University of Oklahoma. I am grateful to Beatriz Maldonado-Bird and Ross Hallren for their valuable comments and help. I specially thank the anonymous referee for the feedback and valuable suggestions. Any omission or mistake entirely relies on the author’s responsibility. Comments and questions can be given at tilsa.oremonago@stonybrook.edu or tilsa.ore@pucp.edu.pe.
Keywords: competition policy, economic development, competition law

Abstract

Implementation of competition policies is one of the most recommended strategies to developing countries as a tool for achieving economic development. Using a panel dataset of over 100 countries and 7 years (from 2005-2011), I estimate the effect of competition on economic development, and also determine which of the comprehensive policy factors are the most relevant for increasing competition. A fixed effects instrumental variable approach is used.I find that competition intensity positively impacts economic development. The estimate is highly significant when effectiveness of antimonopoly policy and squared years of experience handling competition law are used as instruments for competition intensity. Political stability is shown to be a determinant for higher achievement in development. Macroeconomic environment and financial market development are also significant factors that contribute to higher economic development. Less developed countries should work intensively to improve their institutional quality and implement pro-competitive policies that are not only related to competition laws.

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How to Cite
Oré, T. (2013). Assessing Competition Policy on Economic Development. Economia, 36(71), 9-56. Retrieved from http://revistas.pucp.edu.pe/index.php/economia/article/view/6376