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The Impact of Competition on Productivity. Theory and Evidence

Author

Listed:
  • Iuliana-Tania ZLATCU

    (Bucharest University of Economic Studies)

  • Roxana CLODNITCHI

    (Bucharest University of Economic Studies)

Abstract

This paper reviews the theoretical and empirical literature on the impact of competition on firms’ efficiency and productivity. Looking at the effects of changes in competition overtime or analysing the relationship between competition and productivity across many product markets, a large body of empirical studies finds evidence of a positive relationship between competition and productivity, greater competition on the market leading to higher levels of productivity. On the other hand, the relationship between competition and innovation is highly debated, evidence suggesting a non-linear relationship with both very high and very low degree of competition discouraging firms from innovating.

Suggested Citation

  • Iuliana-Tania ZLATCU & Roxana CLODNITCHI, 2018. "The Impact of Competition on Productivity. Theory and Evidence," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 19(4), pages 410-421, October.
    • Handle: RePEc:rom:rmcimn:v:19:y:2018:i:4:p:410-421
    DOI: 10.24818/RMCI.2018.4.410
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    References listed on IDEAS

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    More about this item

    Keywords

    competition; regulatory reforms; productivity; firm efficiency.;
    All these keywords.

    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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