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When do Countries Introduce Competition Policy?

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  • Forslid, Rikard
  • Häckner, Jonas
  • Muren, Astri

Abstract

This paper first presents stylized evidence showing how the date of the introduction of competition policy is correlated with country size. Smaller countries tend to adopt competition policy later. We thereafter present a simple theoretical model with countries of different size and firms competing à la Cournot. The predictions of the model are consistent with the empirical regularity presented. An implication of our model is that globalization may give very different incentives regarding competition policy for small and large developing countries.

Suggested Citation

  • Forslid, Rikard & Häckner, Jonas & Muren, Astri, 2005. "When do Countries Introduce Competition Policy?," CEPR Discussion Papers 5162, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:5162
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    1. Martin Richardson, 2017. "Trade and Competition Policies: Concordia Discors?," World Scientific Book Chapters, in: Dimensions of Trade Policy, chapter 11, pages 221-242, World Scientific Publishing Co. Pte. Ltd..
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    4. Damien Neven & Thomas Ungern-Sternberg & Winand Emons & Pierre Tercier, 1997. "Swiss Competition Policy in the Last Decade," Palgrave Macmillan Books, in: Philippe Bacchetta & Walter Wasserfallen (ed.), Economic Policy in Switzerland, chapter 3, pages 35-61, Palgrave Macmillan.
    5. Barros, Pedro P. & Cabral, Luis, 1994. "Merger policy in open economies," European Economic Review, Elsevier, vol. 38(5), pages 1041-1055, May.
    6. Keith Head & John Ries, 1997. "International Mergers and Welfare under Decentralized Competition Policy," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 1104-1123, November.
    7. Jürgen Basedow, 2004. "Competition Policy in a Globalized Economy: From Extraterritorial Application to Harmonization," Chapters, in: Manfred Neumann & Jürgen Weigand (ed.), The International Handbook of Competition, chapter 10, Edward Elgar Publishing.
    8. Dixit, Avinash, 1984. "International Trade Policy for Oligopolistic Industries," Economic Journal, Royal Economic Society, vol. 94(376a), pages 1-16, Supplemen.
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    Cited by:

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    2. Carletti, Elena & Hartmann, Philipp & Ongena, Steven, 2007. "The economic impact of merger control: what is special about banking?," Working Paper Series 786, European Central Bank.

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    More about this item

    Keywords

    Competition policy; Anti-trust; Trade costs;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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