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Competition, Competition Policy, Competitiveness, Globalisation & Development

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  • Ajit Singh

Abstract

This paper explores the relationship between globalisation, competition, competition policy and competitiveness. It is important to note that although these notions are related, they are conceptually different. This paper contributes by providing a theoretical framework for the main issues which arise in the modern discussion of competition and competition policies in economic development. It also contributes by its extensive treatment of the international dimensions of the subject. Importantly, this paper puts economic development at the centre stage for competition and related policies. It provides a proposal for the establishment of a development-oriented international competition authority. This authority would attempt to limit growth by merger by large multinationals under its purview. They would be allowed to merge provided they divest themselves of a subsidiary of equal value. This would mean that multinationals would not be prohibited to grow by mergers, but they could expand through organic growth or greenfield investment. It would also not stop them from taking over other firms subject to divestiture as outlined. A large body of research on mergers indicates that mega-mergers have the potential of increasing market dominance and reducing contestability. Discouraging such mergers would therefore enhance global contestability, competition, and economic efficiency, while at the same time being distributionally more equitable.

Suggested Citation

  • Ajit Singh, 2014. "Competition, Competition Policy, Competitiveness, Globalisation & Development," Working Papers wp460, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp460
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    File URL: https://www.jbs.cam.ac.uk/cbrwp460/
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    References listed on IDEAS

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    1. Krugman, Paul R, 1987. "Is Free Trade Passe?," Journal of Economic Perspectives, American Economic Association, vol. 1(2), pages 131-144, Fall.
    2. Glen, Jack & Lee, Kevin & Singh, Ajit, 2001. "Persistence of profitability and competition in emerging markets," Economics Letters, Elsevier, vol. 72(2), pages 247-253, August.
    3. Adelina Gschwandtner, 2004. "Evolution of Profit Persistence in the US: Evidence from four 20-years periods," Vienna Economics Papers 0410, University of Vienna, Department of Economics.
    4. Dani Rodrik, 1992. "The Limits of Trade Policy Reform in Developing Countries," Journal of Economic Perspectives, American Economic Association, vol. 6(1), pages 87-105, Winter.
    5. Amsden, Alice H. & Singh, Ajit, 1994. "The optimal degree of competition and dynamic efficiency in Japan and Korea," European Economic Review, Elsevier, vol. 38(3-4), pages 941-951, April.
    6. Singh, Ajit, 2003. "Special and Differential Treatment, The Multilateral Trading System and Economic Development in the 21st Century," MPRA Paper 24653, University Library of Munich, Germany.
    7. Singh, Ajit, 2007. "Globalization and Industrial Revolutions in India and China: Implications for Advanced and Developing Economies and for National and International Policies," MPRA Paper 24286, University Library of Munich, Germany.
    8. Ajit Singh, 2003. "Competition, corporate governance and selection in emerging markets," Economic Journal, Royal Economic Society, vol. 113(491), pages 443-464, November.
    9. Howes, C. & Singh, A., 1999. "National Competitiveness, Dynamics of Adjustment and Long-term Economic Growth: Conceptual, Empirical and Policy Issues," Accounting and Finance Discussion Papers 00-af43, Faculty of Economics, University of Cambridge.
    10. B. Burcin Yurtoglu, 2004. "Persistence of firm-level profitability in Turkey," Applied Economics, Taylor & Francis Journals, vol. 36(6), pages 615-625.
    11. Jack Glen & Kevin Lee & Ajit Singh, 2003. "Corporate profitability and the dynamics of competition in emerging markets: a time series analysis," Economic Journal, Royal Economic Society, vol. 113(491), pages 465-484, November.
    12. Jack Glen & Ajit Singh, 2003. "Capital Structure, Rates of Return and Financing Corporate Growth: Comparing Developed and Emerging Markets, 1994-00," Working Papers wp265, Centre for Business Research, University of Cambridge.
    13. Levenstein, Margaret & Suslow, Valerie Y. & Oswald, Lynda J., 2003. "Contemporary International Cartels And Developing Countries: Economic Effects And Implications For Competition Policy," Working Papers 14590, International Agricultural Trade Research Consortium.
    14. Adelina Gschwandtner, 2012. "Evolution Of Profit Persistence In The Usa: Evidence From Three Periods," Manchester School, University of Manchester, vol. 80(2), pages 172-209, March.
    15. Goddard, J. A. & Wilson, J. O. S., 1999. "The persistence of profit: a new empirical interpretation," International Journal of Industrial Organization, Elsevier, vol. 17(5), pages 663-687, July.
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    Cited by:

    1. Trofimov, Ivan D., 2018. "Industry rates of return in Korea and alternative theories of competition: equalising convergence versus tendential equalisation," MPRA Paper 88390, University Library of Munich, Germany.

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    More about this item

    Keywords

    Competition policy; competitiveness; development;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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