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Construction Industry and Competition Policy in Japan

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  • Koki Arai
  • Emi Morimoto

Abstract

This study sheds light on the operation of Japanese competition policy by focusing on a public procurement bid-rigging case in the construction industry. The analysis demonstrates a firm-entry effect on the construction market and shows that the bidding and winning price levels before an investigation by the Japan Fair Trade Commission were higher than they were after the investigation. According to these results, price levels in the bid-rigging period were approximately 6% higher than with competition, and the result is statistically significant. Firm entry is associated with an approximate 2% price reduction, an effect that comes from introducing competition into a coordinated setting.

Suggested Citation

  • Koki Arai & Emi Morimoto, 2017. "Construction Industry and Competition Policy in Japan," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 24(3), pages 345-363, September.
    • Handle: RePEc:taf:ijecbs:v:24:y:2017:i:3:p:345-363
    DOI: 10.1080/13571516.2017.1332130
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    Cited by:

    1. Nakanishi, Yoshinobu, 2022. "Determinants of the number of bidders and win-reserve ratio in open competitive tendering: Relationship-specific investments and incomplete contracts," Japan and the World Economy, Elsevier, vol. 63(C).
    2. Koki Arai, 2021. "The Characteristics of Low Bid Price Survey Standards and Their Impact," Journal of Industry, Competition and Trade, Springer, vol. 21(4), pages 593-608, December.

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