The Implication of Competition Law Enforcement on Economic Growth in Developing Countries

دانشنامه حقوق اقتصادی

Article 1, Volume 20, Issue 3, April 2013   

Document Type: Scientific research

DOI: 10.22067/le.v20i3.34283

Authors

Ebrahim Rahbari^* ; Mohammad Hossein Ghiasi; Yazdan Gudarzi Farahani

Abstract

This article Identifying the effect of competition law on productivity growth, by using a panel data for developing countries. For this purpose, the dynamic panel models have been used to estimate relationships between variables and, the generalized method of moments (GMM). fixed effects and random effects are estimated.
The evidences show that the effect exhibits an asymmetrical pattern depending on the stage of development for each country. For the poor and less developed countries (LDCs) whose institutional frameworks cannot exceed a threshold level, competition law has a very limited effect on changing economic activity, and its legislation is neither harmful nor helpful in terms of market competition or economic growth. As to the developed countries (DCs) and middle-income LDCs, although their institutional frameworks have passed the threshold level, the effect of competition law on growth still depends on the law enforcement efficiency of the government. Without an efficient enforcement scheme, a stronger competition law not only cannot support productivity growth, but might also slow down the potential path of growth.

Keywords

competition law; Economic Growth; developing countries; Panel Data Model