Do Government Policies that Promote Competition Encourage— or Discourage—New Product and Process Development In Low and Middle-Income Countries?

Previous work has shown that firms in low and middle-income countries in Eastern Europe and Central Asia that feel greater pressure to innovate from their competitors are more likely to introduce new products and services than firms that do not feel pressure (Carlin and others 2001; World Bank 2004)...

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Main Author:	Clarke, George R. G.
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2012
Subjects:	ANTITRUST BARRIERS TO ENTRY BUSINESS PERFORMANCE CARTELS CITIES COLLUSION COMPETITION LAW COMPETITION POLICY CONSUMERS DOMESTIC MARKET DOMESTIC MARKETS ECONOMIES OF SCALE ECONOMISTS EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE FINANCIAL MARKETS FINANCIAL RESOURCES FOREIGN COMPETITION GDP IMPORTS INCOME INNOVATION INNOVATIONS INTERNATIONAL MARKETS LEGISLATION MANAGERIAL SLACK MARKET COMPETITION MARKET POWER MARKETING MERGERS MIDDLE INCOME COUNTRIES MONOPOLIES MONOPOLY RENTS NEW PRODUCT DEVELOPMENT PATENTS PREDATORY PRICING PRICE COMPETITION PRODUCTION PROCESSES PRODUCTIVITY PURCHASING REGULATORY REQUIREMENTS RETAINED EARNINGS SALES SUPPLIERS TARIFF BARRIERS TECHNOLOGICAL INNOVATIONS THEORETICAL MODELS TOTAL FACTOR PRODUCTIVITY TRADE LIBERALIZATION TRANSITION ECONOMIES WHOLESALERS
Online Access:	http://documents.worldbank.org/curated/en/2005/01/5554051/government-policies-promote-competition-encourage-or-discourage-new-product-process-development-low-middle-income-countries http://hdl.handle.net/10986/8999

id	okr-10986-8999
recordtype	oai_dc
spelling	okr-10986-89992021-04-23T14:02:42Z Do Government Policies that Promote Competition Encourage— or Discourage—New Product and Process Development In Low and Middle-Income Countries? Clarke, George R. G. ANTITRUST BARRIERS TO ENTRY BUSINESS PERFORMANCE CARTELS CITIES COLLUSION COMPETITION LAW COMPETITION POLICY CONSUMERS DOMESTIC MARKET DOMESTIC MARKETS ECONOMIES OF SCALE ECONOMISTS EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE FINANCIAL MARKETS FINANCIAL RESOURCES FOREIGN COMPETITION GDP IMPORTS INCOME INNOVATION INNOVATIONS INTERNATIONAL MARKETS LEGISLATION MANAGERIAL SLACK MARKET COMPETITION MARKET POWER MARKETING MERGERS MIDDLE INCOME COUNTRIES MONOPOLIES MONOPOLY RENTS NEW PRODUCT DEVELOPMENT PATENTS PREDATORY PRICING PRICE COMPETITION PRODUCTION PROCESSES PRODUCTIVITY PURCHASING REGULATORY REQUIREMENTS RETAINED EARNINGS SALES SUPPLIERS TARIFF BARRIERS TECHNOLOGICAL INNOVATIONS THEORETICAL MODELS TOTAL FACTOR PRODUCTIVITY TRADE LIBERALIZATION TRANSITION ECONOMIES WHOLESALERS Previous work has shown that firms in low and middle-income countries in Eastern Europe and Central Asia that feel greater pressure to innovate from their competitors are more likely to introduce new products and services than firms that do not feel pressure (Carlin and others 2001; World Bank 2004). However, competition also appears to affect innovation in other ways. In particular, firms in these countries that face greater price competition appear to be less likely to innovate than other firms (Carlin and others 2001). The author assesses how competition and trade policy affect these different aspects of competition and, consequently, assesses their net impact on innovation. He finds that reducing tariffs and enacting and enforcing competition laws modestly increases both the pressure that firms feel regarding innovation and the level of price competition in the domestic economy. The net impact that lower tariffs have on new product and process development appears to be negative but small-for the most part the opposing effects cancel out. In contrast, stricter competition laws and better enforcement of those laws appear to increase the likelihood of new product and process development, especially when competition is treated as endogenous to innovation. 2012-06-26T13:51:02Z 2012-06-26T13:51:02Z 2005-01 http://documents.worldbank.org/curated/en/2005/01/5554051/government-policies-promote-competition-encourage-or-discourage-new-product-process-development-low-middle-income-countries http://hdl.handle.net/10986/8999 English en_US Policy Research Working Paper; No. 3471 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ANTITRUST BARRIERS TO ENTRY BUSINESS PERFORMANCE CARTELS CITIES COLLUSION COMPETITION LAW COMPETITION POLICY CONSUMERS DOMESTIC MARKET DOMESTIC MARKETS ECONOMIES OF SCALE ECONOMISTS EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE FINANCIAL MARKETS FINANCIAL RESOURCES FOREIGN COMPETITION GDP IMPORTS INCOME INNOVATION INNOVATIONS INTERNATIONAL MARKETS LEGISLATION MANAGERIAL SLACK MARKET COMPETITION MARKET POWER MARKETING MERGERS MIDDLE INCOME COUNTRIES MONOPOLIES MONOPOLY RENTS NEW PRODUCT DEVELOPMENT PATENTS PREDATORY PRICING PRICE COMPETITION PRODUCTION PROCESSES PRODUCTIVITY PURCHASING REGULATORY REQUIREMENTS RETAINED EARNINGS SALES SUPPLIERS TARIFF BARRIERS TECHNOLOGICAL INNOVATIONS THEORETICAL MODELS TOTAL FACTOR PRODUCTIVITY TRADE LIBERALIZATION TRANSITION ECONOMIES WHOLESALERS
spellingShingle	ANTITRUST BARRIERS TO ENTRY BUSINESS PERFORMANCE CARTELS CITIES COLLUSION COMPETITION LAW COMPETITION POLICY CONSUMERS DOMESTIC MARKET DOMESTIC MARKETS ECONOMIES OF SCALE ECONOMISTS EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE FINANCIAL MARKETS FINANCIAL RESOURCES FOREIGN COMPETITION GDP IMPORTS INCOME INNOVATION INNOVATIONS INTERNATIONAL MARKETS LEGISLATION MANAGERIAL SLACK MARKET COMPETITION MARKET POWER MARKETING MERGERS MIDDLE INCOME COUNTRIES MONOPOLIES MONOPOLY RENTS NEW PRODUCT DEVELOPMENT PATENTS PREDATORY PRICING PRICE COMPETITION PRODUCTION PROCESSES PRODUCTIVITY PURCHASING REGULATORY REQUIREMENTS RETAINED EARNINGS SALES SUPPLIERS TARIFF BARRIERS TECHNOLOGICAL INNOVATIONS THEORETICAL MODELS TOTAL FACTOR PRODUCTIVITY TRADE LIBERALIZATION TRANSITION ECONOMIES WHOLESALERS Clarke, George R. G. Do Government Policies that Promote Competition Encourage— or Discourage—New Product and Process Development In Low and Middle-Income Countries?
relation	Policy Research Working Paper; No. 3471
description	Previous work has shown that firms in low and middle-income countries in Eastern Europe and Central Asia that feel greater pressure to innovate from their competitors are more likely to introduce new products and services than firms that do not feel pressure (Carlin and others 2001; World Bank 2004). However, competition also appears to affect innovation in other ways. In particular, firms in these countries that face greater price competition appear to be less likely to innovate than other firms (Carlin and others 2001). The author assesses how competition and trade policy affect these different aspects of competition and, consequently, assesses their net impact on innovation. He finds that reducing tariffs and enacting and enforcing competition laws modestly increases both the pressure that firms feel regarding innovation and the level of price competition in the domestic economy. The net impact that lower tariffs have on new product and process development appears to be negative but small-for the most part the opposing effects cancel out. In contrast, stricter competition laws and better enforcement of those laws appear to increase the likelihood of new product and process development, especially when competition is treated as endogenous to innovation.
format	Publications & Research :: Policy Research Working Paper
author	Clarke, George R. G.
author_facet	Clarke, George R. G.
author_sort	Clarke, George R. G.
title	Do Government Policies that Promote Competition Encourage— or Discourage—New Product and Process Development In Low and Middle-Income Countries?
title_short	Do Government Policies that Promote Competition Encourage— or Discourage—New Product and Process Development In Low and Middle-Income Countries?
title_full	Do Government Policies that Promote Competition Encourage— or Discourage—New Product and Process Development In Low and Middle-Income Countries?
title_fullStr	Do Government Policies that Promote Competition Encourage— or Discourage—New Product and Process Development In Low and Middle-Income Countries?
title_full_unstemmed	Do Government Policies that Promote Competition Encourage— or Discourage—New Product and Process Development In Low and Middle-Income Countries?
title_sort	do government policies that promote competition encourage— or discourage—new product and process development in low and middle-income countries?
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/01/5554051/government-policies-promote-competition-encourage-or-discourage-new-product-process-development-low-middle-income-countries http://hdl.handle.net/10986/8999
_version_	1764406897450942464

Do Government Policies that Promote Competition Encourage— or Discourage—New Product and Process Development In Low and Middle-Income Countries?

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