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Institutions' Role in Promoting a Competitive Market

Fromell, Hanna LU (2010) NEKK01 20101
Department of Economics
Abstract
This paper aims to examine whether competition law and policies have greater effect on competition when sound institutions are in place. Reports by major global actors as well as governmental reforming, show that there is unanimity on the notion that political reforming is essential in order to reach a more competitive market. Later economic research shows that institutions such as governance effectiveness and trust among people are important in order to sustain and increase economic growth. This paper assumes that this impact is partly due to the fact that institutions increase the incentives to invest and that the effect of institutions is especially clear among the smaller entrepreneurs since they are more sensitive to unsecure markets.... (More)
This paper aims to examine whether competition law and policies have greater effect on competition when sound institutions are in place. Reports by major global actors as well as governmental reforming, show that there is unanimity on the notion that political reforming is essential in order to reach a more competitive market. Later economic research shows that institutions such as governance effectiveness and trust among people are important in order to sustain and increase economic growth. This paper assumes that this impact is partly due to the fact that institutions increase the incentives to invest and that the effect of institutions is especially clear among the smaller entrepreneurs since they are more sensitive to unsecure markets. With a cross-country regression comparing 30 OECD-countries, this paper finds that from a first look competition law and policies appear to have no effect on competition. However, when analysing the same relationship with the modification that institutions are added as an explaining variable, the results indicate that competition law and policies have a positive effect on competition for those few countries that have sound institutions in place. (Less)
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author
Fromell, Hanna LU
supervisor
organization
course
NEKK01 20101
year
type
M2 - Bachelor Degree
subject
keywords
Competition, Economic Development, Institutions, Policies
language
English
id
1614410
date added to LUP
2010-06-23 13:00:03
date last changed
2010-06-23 13:00:03
@misc{1614410,
  abstract     = {This paper aims to examine whether competition law and policies have greater effect on competition when sound institutions are in place. Reports by major global actors as well as governmental reforming, show that there is unanimity on the notion that political reforming is essential in order to reach a more competitive market. Later economic research shows that institutions such as governance effectiveness and trust among people are important in order to sustain and increase economic growth. This paper assumes that this impact is partly due to the fact that institutions increase the incentives to invest and that the effect of institutions is especially clear among the smaller entrepreneurs since they are more sensitive to unsecure markets. With a cross-country regression comparing 30 OECD-countries, this paper finds that from a first look competition law and policies appear to have no effect on competition. However, when analysing the same relationship with the modification that institutions are added as an explaining variable, the results indicate that competition law and policies have a positive effect on competition for those few countries that have sound institutions in place.},
  author       = {Fromell, Hanna},
  keyword      = {Competition,Economic Development,Institutions,Policies},
  language     = {eng},
  note         = {Student Paper},
  title        = {Institutions' Role in Promoting a Competitive Market},
  year         = {2010},
}