Is competition policy useful for emerging countries? An empirical analysis
Authors:
Prof. Emeritus Roberto Pardolesi (LUISS “Guido Carli” University of Rome, Law & Economics LAB)
Dr Danilo Samà (CDC Cartel Damage Claims, Law & Economics LAB)
Abstract:
The ultimate objective of the paper is to empirically investigate the effectiveness of competition policy in emerging countries, focusing on broader indicators of market performance in order to understand whether the presence of an antitrust authority has a significant impact, hence an effective utility, on the level of competition of a developing country. From a policy perspective, the aim of the paper is also to assess whether the enforcement of a competition policy regime in a developing country has the same beneficial effects on the intensity of competition usually claimed to take place in the most developed countries. Relying upon a dataset and the connected econometric model developed by one of the authors, we provisionally conclude that in developing countries the institutional quality of the competition authorities matters more than the mere existence or the degree of competence for the effectiveness of a competition policy regime.
Keywords:
competition authorities, competition policy, developing countries, economic development, economic growth, law & economics, market concentration, market efficiency, market performance, new institutional economics, political economy
JEL classification:
C21; C26; K21; L40
Year:
2015
Pages:
25-38
Citation:
Pardolesi, Roberto, Samà, Danilo (2015), Is competition policy useful for emerging countries? An empirical analysis, in Bellantuomo, Giuseppe, de Rezende Lara, Fabiano Teodoro (eds.), Law, development and innovation, SxI - Springer for Innovation \ SxI - Springer per l’Innovazione, Vol. 13, Springer International Publishing, Geneva, Switzerland, pp. 25-38.
D.O.I.:
10.1007/978-3-319-13311-9_3
Book title:
Law, development and innovation
Editors:
Prof. Dr Giuseppe Bellantuono (University of Trento, Italy)
Prof. Fabiano Teodoro de Rezende Lara (Universidade Federal de Minas Gerais, Brazil)
Year:
2015
Series title:
SxI - Springer for Innovation \ SxI - Springer per l’Innovazione
Series volume:
13
Edition:
1st
Publisher:
Springer International Publishing
Copyright holder:
Springer International Publishing Switzerland
Pages:
222
ISSN (series):
2239-2688
D.O.I.:
10.1007/978-3-319-13311-9
ISBN (print):
978-3-319-13310-2
ISBN (electronic):
978-3-319-13311-9
In Grossman and Helpman’s (1994) canonical "Protection for Sale" (PFS) model political competition between industry lobbies is purely driven by their interests as consumers. This paper introduces demand linkages and oligopolistic competition into PFS framework to address the rivalry among lobbies due to product substitutability. It shows that increased substitutability weakens the interest groups’ incentives to lobby and reduces tariff distortions. This may explain why empirical tests of PFS find surprisingly little impact of lobbies on the government trade policy decision. The paper also analyzes endogenous lobby formation, suggesting that demand linkages may adversely affect industry decision to get organized.
by Elena Paltseva, forthcoming in Canadian Journal of Economics
We investigate the impact of procurement thresholds on strategic behavior of public buyers in Sweden. We document signs of “bunching” at the threshold, which suggests that strategic behavior in procurement is potentially important in Sweden, and should not be overlooked in the on-going public debate on the procurement thresholds. At the same time, data limitations do not allow us to access the impact of this strategic behavior on procurement outcomes and efficiency. This calls for better and more extensive procurement data collection.
This paper reports results from a laboratory experiment exploring the relationship between reputation and entry in procurement. There is widespread concern among regulators that favoring suppliers with good past performance, a standard practice in private procurement, may hinder entry by new (smaller or foreign) firms in public procurement markets. Our results suggest that while some reputational mechanisms indeed reduce the frequency of entry, so that the concern is warranted, appropriately designed reputation mechanisms actually stimulate entry. Since quality increases but not prices, our data also suggest that the introduction of reputation may generate large welfare gains from the buyer.
We examine the effects of bank deregulation on the spatial dynamics of retail-bank branching, exploiting, much like a quasi-natural experiment, the context of intense liberalization
reforms in Belgium in the late nineties. Using fine-grained data on branch network dynamics within the metropolitan area of Antwerp and advancing novel spatial econometric techniques, we show that these liberalization reforms radically shifted and accelerated branch network dynamics. Entry and exit dynamics substantially intensified, the level change in financial void grew significantly, and bank choice markedly declined. Moreover, all these changes consistently extended (even with greater intensity) after the liberalization peak. However, the immediate and longer-term spatial ramifications of the financial sector liberalization were very distinct. All immediate changes systematically, differentially impacted the poorer and wealthier neighborhoods, disenfranchising the poorer neighbourhoods and favoring their wealthier counterparts. The longer-term e¤ects on spatial patterns of change no longer exhibited this systematic relationship with neighborhood income. We draw out the policy implications of our findings.
Based on my recent work with several co-authors this paper explores the relationship between discretion, reputation, competition and entry in procurement markets. I focus especially on public procurement, which is highly regulated for accountability and trade reasons. In Europe regulation constrains the use of past performance information to select contractors while in the US its use is encouraged. I present some novel evidence on the benefits of allowing buyers to use reputational indicators based on past performance and discuss the complementary roles of discretion and restricted competition in reinforcing relational/reputational forces, both in theory and in a new
empirical study on the effects restricted rather than open auctions. I conclude reporting preliminary results form a laboratory experiment showing that reputational mechanisms can be designed to stimulate rather than hindering new entry.
This paper reports results from an experiment studying how fines, leniency programs and reward schemes for whistleblowers affect cartel formation and prices. Antitrust without leniency reduces cartel formation, but increases cartel prices: subjects use costly fines as (altruistic) punishments. Leniency further increases deterrence, but stabilizes surviving cartels: subjects appear to anticipate harsher times after defections as leniency reduces recidivism and lowers post-conviction prices. With rewards, cartels are reported systematically and prices finally fall. If a ringleader is excluded from leniency, deterrence is unaffected but prices grow. Differences between treatments in Stockholm and Rome suggest culture may affect optimal law enforcement.
The EU Leniency Programme (LP) aims to encourage the dissolution of existing cartels and the deterrence of future cartels, through spontaneous reporting and/or significant cooperation by cartel members during an investigation. However, the European Commission guidelines are rather vague in terms of the factors that influence the granting and scale of fine reductions. As expected, the results shown that the first reporting or cooperating firm receives generous fine reductions. More importantly, there is some evidence that firms can “learn how to play the leniency game”, either learning how to cheat or how to report, as the reductions given to multiple oenders (and their cartel partners) are substantially higher. These results have an ambiguous impact on firms’ incentives and major implications for policy making.
By Catarina Marvao, SITE Working Paper.
In Grossman and Helpman’s (1994) canonical "Protection for Sale" (PFS) model political competition between industry lobbies is purely driven by their interests as consumers. This paper introduces demand linkages and oligopolistic competition into PFS framework to address the rivalry among lobbies due to product substitutability. It shows that increased substitutability weakens the interest groups’ incentives to lobby and reduces tariff distortions. This may explain why empirical tests of PFS find surprisingly little impact of lobbies on the government trade policy decision. The paper also analyzes endogenous lobby formation, suggesting that demand linkages may adversely affect industry decision to get organized.
by Elena Paltseva, forthcoming in Canadian Journal of Economics
We investigate the impact of procurement thresholds on strategic behavior of public buyers in Sweden. We document signs of “bunching” at the threshold, which suggests that strategic behavior in procurement is potentially important in Sweden, and should not be overlooked in the on-going public debate on the procurement thresholds. At the same time, data limitations do not allow us to access the impact of this strategic behavior on procurement outcomes and efficiency. This calls for better and more extensive procurement data collection.
This paper reports results from a laboratory experiment exploring the relationship between reputation and entry in procurement. There is widespread concern among regulators that favoring suppliers with good past performance, a standard practice in private procurement, may hinder entry by new (smaller or foreign) firms in public procurement markets. Our results suggest that while some reputational mechanisms indeed reduce the frequency of entry, so that the concern is warranted, appropriately designed reputation mechanisms actually stimulate entry. Since quality increases but not prices, our data also suggest that the introduction of reputation may generate large welfare gains from the buyer.
We examine the effects of bank deregulation on the spatial dynamics of retail-bank branching, exploiting, much like a quasi-natural experiment, the context of intense liberalization
reforms in Belgium in the late nineties. Using fine-grained data on branch network dynamics within the metropolitan area of Antwerp and advancing novel spatial econometric techniques, we show that these liberalization reforms radically shifted and accelerated branch network dynamics. Entry and exit dynamics substantially intensified, the level change in financial void grew significantly, and bank choice markedly declined. Moreover, all these changes consistently extended (even with greater intensity) after the liberalization peak. However, the immediate and longer-term spatial ramifications of the financial sector liberalization were very distinct. All immediate changes systematically, differentially impacted the poorer and wealthier neighborhoods, disenfranchising the poorer neighbourhoods and favoring their wealthier counterparts. The longer-term e¤ects on spatial patterns of change no longer exhibited this systematic relationship with neighborhood income. We draw out the policy implications of our findings.
Based on my recent work with several co-authors this paper explores the relationship between discretion, reputation, competition and entry in procurement markets. I focus especially on public procurement, which is highly regulated for accountability and trade reasons. In Europe regulation constrains the use of past performance information to select contractors while in the US its use is encouraged. I present some novel evidence on the benefits of allowing buyers to use reputational indicators based on past performance and discuss the complementary roles of discretion and restricted competition in reinforcing relational/reputational forces, both in theory and in a new
empirical study on the effects restricted rather than open auctions. I conclude reporting preliminary results form a laboratory experiment showing that reputational mechanisms can be designed to stimulate rather than hindering new entry.
This paper reports results from an experiment studying how fines, leniency programs and reward schemes for whistleblowers affect cartel formation and prices. Antitrust without leniency reduces cartel formation, but increases cartel prices: subjects use costly fines as (altruistic) punishments. Leniency further increases deterrence, but stabilizes surviving cartels: subjects appear to anticipate harsher times after defections as leniency reduces recidivism and lowers post-conviction prices. With rewards, cartels are reported systematically and prices finally fall. If a ringleader is excluded from leniency, deterrence is unaffected but prices grow. Differences between treatments in Stockholm and Rome suggest culture may affect optimal law enforcement.
The EU Leniency Programme (LP) aims to encourage the dissolution of existing cartels and the deterrence of future cartels, through spontaneous reporting and/or significant cooperation by cartel members during an investigation. However, the European Commission guidelines are rather vague in terms of the factors that influence the granting and scale of fine reductions. As expected, the results shown that the first reporting or cooperating firm receives generous fine reductions. More importantly, there is some evidence that firms can “learn how to play the leniency game”, either learning how to cheat or how to report, as the reductions given to multiple oenders (and their cartel partners) are substantially higher. These results have an ambiguous impact on firms’ incentives and major implications for policy making.
By Catarina Marvao, SITE Working Paper.
Does ownership matter? The growth of China´s chemical market is primarily cap...Kai Pflug
The growth of China´s chemical market is primarily captured by private domestic companies at the expense of state-owned entities and multinational chemical companies. Why?
Leniency policies offering immunity to the first cartel member that blows the whistle and self-reports to the antitrust authority have become the main instrument in the fight against cartels around the world. In public procurement markets, however, bid-rigging schemes are often accompanied by corruption of public officials. In the absence of coordinated forms of leniency for unveiling corruption, a policy offering immunity from antitrust sanctions may not be sufficient to encourage wrongdoers to blow the whistle, as the leniency recipient will then be exposed to the risk of conviction for corruption. Explicitly introducing leniency policies for corruption, as has been recently done in Brazil and Mexico, is only a first step. To increase the effectiveness of leniency in multiple offense cases, we suggest, besides extending automatic leniency to individual criminal sanctions, the creation of a ‘one-stop-point’ enabling firms and individuals to report different crimes simultaneously and receive leniency for all of them at once if they are entitled to it.
This presentation by South Africa was made during the break-out Session 1, “Techniques and evidence for assessing market power” in the discussion “Economic analysis and evidence in abuse cases” held at the 20th meeting of the OECD Global Forum on Competition on 7 December 2021. More papers and presentations on the topic can be found out at oe.cd/eac.
Public procurement is the purchase by governments of goods, services and works and accounts for 13% of GDP in OECD member countries. It is the government activity most vulnerable to waste, fraud and corruption. Integrity in public procurement is essential in maintaining citizens’ trust in government. More information at www.oecd.org/gov/ethics/procurement
This paper analyses the employment effects of mergers and acquisitions (M&As) by using matched establishment-level data from Finland over the period 1989–2003. The data covers all sectors. We compare the employment effects of cross-border M&As with the effects arising from two different types of domestic M&As and internal restructurings. The results reveal that cross-border M&As lead to downsizing in manufacturing employment. The effects of cross-border M&As on employment in nonmanufacturing are much weaker. Changes in ownership associated with domestic M&As and internal restructurings also typically cause employment losses, but they exhibit an interesting sectoral variation.
This presentation by Amelia Fletcher, Professor of Competition Policy, Norwich Business School and Non-Executive Director, UK Financial Conduct Authority ; was made during the Workshop on market studies selection and prioritisation of sectors and industries held on 9 March 2017 at the OECD Headquarters. More papers and presentations on the topic can be found out at http://www.oecd.org/daf/competition/market-studies-workshop-on-selection-prioritisation-of-sectors-industries.htm
This presentation by Pinar Akman, Professor of Competition Law & Director of Centre for Business Law and Practice, University of Leeds, was made during the discussion “How can competition contribute to fairer societies?”, held during the 17th OECD Global Forum on Competition on 29 November 2018. More documents and presentations on this topic can be found at oe.cd/cfs.
Foreign subsidiary performance and market efficiency effects are estimated and confronted in this paper using a rich firm-level panel for Polish manufacturing. Besides estimating total factor productivity, other performance measures are calculated and contrasted such as labor productivity, employment growth, markup levels and profitability. The findings show that foreign subsidiaries in Poland pay more (in wages and capital), earn less (in terms of profitability or ROA) and work harder (in terms of TFP and labor productivity) relative to their domestic counterparts. Foreign subsidiaries contribute with higher employment growth than other domestic and new firms. There is no evidence that foreign subsidiaries have significantly reduced market efficiency within the period of study and across the industries and entry modes investigated on average. Controlling for competition (which is found to have a negative effect on efficiency) the paper documents significant intra-industry spillovers. The effect is estimated to be twice as high within the foreign owned industrial communities as compared to the cross effect to domestic firms.
Authored by: Camilla Jensen
Published in 2009
China Business Report 2013-14 Highlights by AmCham ShanghaiJuha Moilanen (莫寒)
A summary of the China 2013-14 Business Report, published in Feb 2014 by the American Chamber of Commerce in Shanghai.
Edit: Added analysis by Beijing-based IP/IT lawyer, law professor Stan Abrams
The effectiveness of competition policy: an econometric assessment in develop...Dr Danilo Samà
The effectiveness of competition policy: an econometric assessment in developed and developing countries
Author:
Dr Danilo Samà (LUISS “Guido Carli” University, Law & Economics LAB)
Abstract:
The ultimate objective of the present paper is to empirically investigate the effectiveness of competition policy in developed and developing countries. Although its importance is continuously increasing, the effectiveness of competition policy still seems to lack the attention that it would deserve. At the present state of art, the number of academic contributions that attempts to estimate its impact on relevant economic variables appears very limited, in particular for the less developed countries. However, an empirical literature aimed at measuring in objective terms the effect of competition policy on economic growth is emerging, starting from narrow variables of interest, such as Gross Domestic Product and Total Factor Productivity. As a result, the principal aim of the current work is to contribute to this branch of research, focusing on broader indicators of market performance, in order to understand whether the presence of an antitrust authority has a significant impact, thus an effective utility, on the level of competition of a country.
Keywords:
competition authorities, competition policy, developed countries, developing countries, economic development, economic growth, law & economics, market concentration, market efficiency, market performance, new institutional economics, political economy
JEL classification:
C21; C26; K21; L40
Year:
2013
Pages:
1-50
Citation:
Samà, Danilo (2013), The effectiveness of competition policy: an econometric assessment in developed and developing countries, Law & Economics LAB, LUISS “Guido Carli” University, Rome, Italy, pp. 1-50.
Essays on economic analysis of competition law: theory and practice (Ph.D. di...Dr Danilo Samà
Essays on economic analysis of competition law: theory and practice
Author:
Dr Danilo Samà (LUISS “Guido Carli” University, Law & Economics LAB)
Abstract:
The Ph.D. dissertation, submitted to LUISS “Guido Carli” University of Rome in fulfillment of the requirements for the Degree of Doctor of Philosophy in Economic Analysis of Competition Law (XXV cicle), is the result of a scientific research in the field of the economic analysis of competition law developed through academic experiences at the Erasmus Rotterdam University in the Netherlands, the Ghent University in Belgium, the University of Hamburg in Germany and the Toulouse School of Economics in France, as well as through professional experiences as competition economist at the Antitrust Department of Pavia & Ansaldo and the Directorate-General for Competition (DG COMP) of the European Commission.
Keywords:
antitrust, competition economics, competition law, competition policy
JEL classification:
B21; C01; K21; L00; L4
Year:
2014
Pages:
1-40
Citation:
Samà, Danilo (2014), Essays on economic analysis of competition law: theory and practice, Law & Economics LAB, LUISS “Guido Carli” University, Rome, Italy, pp. 1-40.
This document includes a selection of quotes from all speakers of the 2020 OECD Competition Open Day held in Paris on 26 February 2020. For more on the event please access oe.cd/comp-open-day-20
This paper estimates the impact of competition policy on total factor productivity growth for 22 industries in twelve OECD countries over 1995 to 2005. We find a positive and significant effect of competition policy as measured by created indexes. We provide results based on instrumental variables estimators and heterogeneous effects to support the causal nature of the established link. The effect is particularly strong for specific aspects of competition policy related to its institutional setup and antitrust activities. It is also strengthened by good legal systems, suggesting complementarities between competition policy and the efficiency of law enforcement institutions.
Does ownership matter? The growth of China´s chemical market is primarily cap...Kai Pflug
The growth of China´s chemical market is primarily captured by private domestic companies at the expense of state-owned entities and multinational chemical companies. Why?
Leniency policies offering immunity to the first cartel member that blows the whistle and self-reports to the antitrust authority have become the main instrument in the fight against cartels around the world. In public procurement markets, however, bid-rigging schemes are often accompanied by corruption of public officials. In the absence of coordinated forms of leniency for unveiling corruption, a policy offering immunity from antitrust sanctions may not be sufficient to encourage wrongdoers to blow the whistle, as the leniency recipient will then be exposed to the risk of conviction for corruption. Explicitly introducing leniency policies for corruption, as has been recently done in Brazil and Mexico, is only a first step. To increase the effectiveness of leniency in multiple offense cases, we suggest, besides extending automatic leniency to individual criminal sanctions, the creation of a ‘one-stop-point’ enabling firms and individuals to report different crimes simultaneously and receive leniency for all of them at once if they are entitled to it.
This presentation by South Africa was made during the break-out Session 1, “Techniques and evidence for assessing market power” in the discussion “Economic analysis and evidence in abuse cases” held at the 20th meeting of the OECD Global Forum on Competition on 7 December 2021. More papers and presentations on the topic can be found out at oe.cd/eac.
Public procurement is the purchase by governments of goods, services and works and accounts for 13% of GDP in OECD member countries. It is the government activity most vulnerable to waste, fraud and corruption. Integrity in public procurement is essential in maintaining citizens’ trust in government. More information at www.oecd.org/gov/ethics/procurement
This paper analyses the employment effects of mergers and acquisitions (M&As) by using matched establishment-level data from Finland over the period 1989–2003. The data covers all sectors. We compare the employment effects of cross-border M&As with the effects arising from two different types of domestic M&As and internal restructurings. The results reveal that cross-border M&As lead to downsizing in manufacturing employment. The effects of cross-border M&As on employment in nonmanufacturing are much weaker. Changes in ownership associated with domestic M&As and internal restructurings also typically cause employment losses, but they exhibit an interesting sectoral variation.
This presentation by Amelia Fletcher, Professor of Competition Policy, Norwich Business School and Non-Executive Director, UK Financial Conduct Authority ; was made during the Workshop on market studies selection and prioritisation of sectors and industries held on 9 March 2017 at the OECD Headquarters. More papers and presentations on the topic can be found out at http://www.oecd.org/daf/competition/market-studies-workshop-on-selection-prioritisation-of-sectors-industries.htm
This presentation by Pinar Akman, Professor of Competition Law & Director of Centre for Business Law and Practice, University of Leeds, was made during the discussion “How can competition contribute to fairer societies?”, held during the 17th OECD Global Forum on Competition on 29 November 2018. More documents and presentations on this topic can be found at oe.cd/cfs.
Foreign subsidiary performance and market efficiency effects are estimated and confronted in this paper using a rich firm-level panel for Polish manufacturing. Besides estimating total factor productivity, other performance measures are calculated and contrasted such as labor productivity, employment growth, markup levels and profitability. The findings show that foreign subsidiaries in Poland pay more (in wages and capital), earn less (in terms of profitability or ROA) and work harder (in terms of TFP and labor productivity) relative to their domestic counterparts. Foreign subsidiaries contribute with higher employment growth than other domestic and new firms. There is no evidence that foreign subsidiaries have significantly reduced market efficiency within the period of study and across the industries and entry modes investigated on average. Controlling for competition (which is found to have a negative effect on efficiency) the paper documents significant intra-industry spillovers. The effect is estimated to be twice as high within the foreign owned industrial communities as compared to the cross effect to domestic firms.
Authored by: Camilla Jensen
Published in 2009
China Business Report 2013-14 Highlights by AmCham ShanghaiJuha Moilanen (莫寒)
A summary of the China 2013-14 Business Report, published in Feb 2014 by the American Chamber of Commerce in Shanghai.
Edit: Added analysis by Beijing-based IP/IT lawyer, law professor Stan Abrams
The effectiveness of competition policy: an econometric assessment in develop...Dr Danilo Samà
The effectiveness of competition policy: an econometric assessment in developed and developing countries
Author:
Dr Danilo Samà (LUISS “Guido Carli” University, Law & Economics LAB)
Abstract:
The ultimate objective of the present paper is to empirically investigate the effectiveness of competition policy in developed and developing countries. Although its importance is continuously increasing, the effectiveness of competition policy still seems to lack the attention that it would deserve. At the present state of art, the number of academic contributions that attempts to estimate its impact on relevant economic variables appears very limited, in particular for the less developed countries. However, an empirical literature aimed at measuring in objective terms the effect of competition policy on economic growth is emerging, starting from narrow variables of interest, such as Gross Domestic Product and Total Factor Productivity. As a result, the principal aim of the current work is to contribute to this branch of research, focusing on broader indicators of market performance, in order to understand whether the presence of an antitrust authority has a significant impact, thus an effective utility, on the level of competition of a country.
Keywords:
competition authorities, competition policy, developed countries, developing countries, economic development, economic growth, law & economics, market concentration, market efficiency, market performance, new institutional economics, political economy
JEL classification:
C21; C26; K21; L40
Year:
2013
Pages:
1-50
Citation:
Samà, Danilo (2013), The effectiveness of competition policy: an econometric assessment in developed and developing countries, Law & Economics LAB, LUISS “Guido Carli” University, Rome, Italy, pp. 1-50.
Essays on economic analysis of competition law: theory and practice (Ph.D. di...Dr Danilo Samà
Essays on economic analysis of competition law: theory and practice
Author:
Dr Danilo Samà (LUISS “Guido Carli” University, Law & Economics LAB)
Abstract:
The Ph.D. dissertation, submitted to LUISS “Guido Carli” University of Rome in fulfillment of the requirements for the Degree of Doctor of Philosophy in Economic Analysis of Competition Law (XXV cicle), is the result of a scientific research in the field of the economic analysis of competition law developed through academic experiences at the Erasmus Rotterdam University in the Netherlands, the Ghent University in Belgium, the University of Hamburg in Germany and the Toulouse School of Economics in France, as well as through professional experiences as competition economist at the Antitrust Department of Pavia & Ansaldo and the Directorate-General for Competition (DG COMP) of the European Commission.
Keywords:
antitrust, competition economics, competition law, competition policy
JEL classification:
B21; C01; K21; L00; L4
Year:
2014
Pages:
1-40
Citation:
Samà, Danilo (2014), Essays on economic analysis of competition law: theory and practice, Law & Economics LAB, LUISS “Guido Carli” University, Rome, Italy, pp. 1-40.
This document includes a selection of quotes from all speakers of the 2020 OECD Competition Open Day held in Paris on 26 February 2020. For more on the event please access oe.cd/comp-open-day-20
This paper estimates the impact of competition policy on total factor productivity growth for 22 industries in twelve OECD countries over 1995 to 2005. We find a positive and significant effect of competition policy as measured by created indexes. We provide results based on instrumental variables estimators and heterogeneous effects to support the causal nature of the established link. The effect is particularly strong for specific aspects of competition policy related to its institutional setup and antitrust activities. It is also strengthened by good legal systems, suggesting complementarities between competition policy and the efficiency of law enforcement institutions.
News, case studies and articles from Asian-Pacific competition authorities are welcome. If you have material that you wish to be considered for publication in this newsletter, please contact ajahn@oecdkorea.org.
Strong competition undoubtedly contributes to a country’s productivity and economic growth. The primary objective of a competition policy is to enhance consumer welfare by promoting competition and controlling practices that could restrict it. More competitive markets stimulate innovation and generally lead to lower prices for consumers, increased product variety and quality, more entry and enhanced investment. Overall, greater competition is expected to deliver higher levels of welfare and economic growth.
This presentation by the OECD Secretariat was prepared for the discussion on “Using market studies to tackle emerging competition issues” held at the 19th OECD Global Forum on Competition on 10 December 2020. More papers and presentations on the topic can be found at http://oe.cd/mstei.
This presentation was uploaded with the author’s consent.
The Impact of Corruption on Firm Performance: Evidence from PakistanMuhammad Arslan
The purpose of this study is to investigate the impact of bribery on firm performance and provides quantitative
estimates of the impact of corruption on the performance of the firm. Impact of bribery is checked through the
questionnaire which is distributed among 100 respondents. In theoretical framework, firm performance is
dependent variable and bribery is independent variable. The correlation between firm performance and bribery
which is measure in obtaining more government contracts in questioner and bribery which is measure as cost of
obtaining the contracts is (r = -0.8012) having negative association between them. The size value of correlation
is (r = -0.0074 & -0.0056) showing that the size is not important in bribery and have subsequently have no affect
on firm performance. The value of R-Square in table 2 is close to 0.649 which indicate very well fit to data. It
means that almost 65 % change is due to the response variable (bribery). F-test value is very significant in both
table showing that the model is best fitted with the data. Sample size is one of the study limitation which could
be removed in future research by enlarging sample size.
This presentation by Miguel de la Mano, Executive Vice President at Compass Lexicon, was made during the Workshop on market studies selection and prioritisation of sectors and industries held on 9 March 2017 at the OECD Headquarters. More papers and presentations on the topic can be found out at http://www.oecd.org/daf/competition/market-studies-workshop-on-selection-prioritisation-of-sectors-industries.htm
Read the complete article, see videos and more studies:
http://ged-project.de/2014/02/07/benefits-transatlantic-free-trade-deal/
Who are the winners and losers in a Transatlantic Trade and Investment Partnership (TTIP). What does TTIP mean for employment? How would TTIP affect economic disparities in the EU? Are the effects on the EU single market a threat to European cohesion?
Adapting to Change: Using PEST Analysis for Better Decision-MakingCIToolkit
A strategic and structured planning tool for evaluating the external environment of an organization. PEST stands for Political, Economic, Social, and Technological external factors.
eGovernment measurement for policy makersePractice.eu
Author: Jeremy Millard.
The eGovernment policy focus has moved over the last five years from being mainly concerned with efficiency to being concerned both with efficiency and effectiveness. This paper examines the current and future development of eGovernment policy making, and the critical role that measurement and impact analysis has in it.
This presentation by L. Pinheiro, A.C. Faye, M. Ginn, J. Lehmann and J. Posch (Analysis Group) summarises the key findings of their research paper on the Analysis of Market Definition and Competitive Effects submitted to the OECD project on Gender inclusive competition policy. It was delivered during a workshop held virtually on 7 October 2021.
More materials on the topic can be found at http://oe.cd/gicp.
This presentation was uploaded with the authors’ consent.
Presentation by Paulo Magina, Head of the Public Procurement Unit, OECD Public Governance Directorate, on central purchasing bodies: a framework for measuring productivity and economic impact, Tbilisi, 6-7 November 2019.
Effects of Government Procurement on Prompt Tendering and Supply of Goods: A...inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Technological innovation is reshaping markets and creating new opportunities for businesses at a faster rate than at any other time in living memory. But to realise the promise of greater economic growth, incumbent businesses, challengers and the policymakers who regulate them need to find a balance that encourages fairness without either stifling entrepreneurialism or compromising the public interest.
Finding this balance has proven difficult for businesses and industry regulators alike.
In order to build greater understanding of the trade-offs at play in ensuring a level playing field, this report explores the specific challenges that regulators face when it comes to disruptors, and explores workable models for increased collaboration between the public and private sectors.
APPLICATION OF ECONOMETRICS
it helps u to understand why we study econometrics when im coming to know these application of econometrics my concepts are clear
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Competition policy, cartel enforcement and leniency program
Author:
Dr Danilo Samà (LUISS “Guido Carli” University)
Abstract:
The present assessment focuses on the antitrust action in detecting and fighting oligopolistic collusion, analyzing the development of the innovative and modern leniency policy. Following the examination of the main conditions and reasons for cartel stability and sustainability, our attempt is to comprehend under which circumstances leniency program represents a functional and successful tool for preventing the formation of anti-competitive agreements.
Keywords:
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JEL classification:
C70; K21; L13
Year:
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Pages:
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Citation:
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Dr Danilo Samà (LUISS “Guido Carli” University, Law & Economics LAB)
Abstract:
L’articolo si propone di comprendere in base a quali condizioni sconti fedeltà adottati da un’impresa dominante comportino effetti anticoncorrenziali. Gli schemi fidelizzanti, infatti, sebbene estremamente frequenti nelle transazioni di mercato, qualora applicati da un’impresa dominante, rischiano di essere giudicati illeciti per sé, come comprovato dalla casistica giurisprudenziale finora emersa a livello europeo e dal severo scrutinio riservato delle autorità nazionali della concorrenza. Il lavoro dapprima fornisce una panoramica analitica delle pratiche fidelizzanti, concentrando in particolare l’attenzione sugli sconti retroattivi, ed approfondisce importanti implicazioni economiche, come gli effetti lock-in e suction. Successivamente vengono discusse le novità introdotte dalle linee guida per l’applicazione dell’Art. 102 TFUE, le quali richiedono un’analisi concreta degli effetti di mercato delle condotte escludenti. Alla luce di un estensivo studio dell’as-efficient competitor test, il nuovo approccio della Commissione Europea verso gli sconti fedeltà viene analizzato in dettaglio con riferimento ad un caso antitrust recentemente esaminato a livello europeo (Tomra). In conclusione, viene sviluppato un approccio economico per l’analisi degli effetti, e dunque della legalità, degli schemi fidelizzanti, in conformità con una coerente teoria del danno per il consumatore.
Keywords:
sconti fedeltà, abuso di posizione dominante, contratti di esclusiva, monopolizzazione, prezzi non lineari, prezzi predatori, teoria del danno, test del concorrente altrettanto efficiente, Tomra
JEL classification:
K21; L12; L42
Journal:
Mercato Concorrenza Regole
Editor:
Il Mulino (Bologna, Italy)
Year:
2013
Pages:
237-266
Citation:
Samà, Danilo (2013), Sconti fedeltà tra approccio economico e danno per il consumatore, Mercato Concorrenza Regole, Vol. XV, N. 2, Il Mulino, Bologna, Italy, pp. 237-266.
D.O.I.:
10.1434/74504
“Per rientrare c’è sempre tempo, non per partire”: la storia europea di Danil...Dr Danilo Samà
“Per rientrare c’è sempre tempo, non per partire”: la storia europea di Danilo Samà, economista antitrust, con un traineeship presso la Commissione europea, interview by Ilaria Mariotti for Repubblica degli Stagisti (www.repubblicadeglistagisti.it), 6 August 2014, Milan, Italy.
Essays on economic analysis of competition law: theory and practiceDr Danilo Samà
Essays on economic analysis of competition law: theory and practice
Author:
Dr Danilo Samà (LUISS “Guido Carli” University, Law & Economics LAB)
Abstract:
The Ph.D. dissertation, submitted to LUISS “Guido Carli” University of Rome in fulfillment of the requirements for the Degree of Doctor of Philosophy in Economic Analysis of Competition Law (XXV cicle), is the result of a scientific research in the field of the economic analysis of competition law developed through academic experiences at the Erasmus Rotterdam University in the Netherlands, the Ghent University in Belgium, the University of Hamburg in Germany and the Toulouse School of Economics in France, as well as through professional experiences as competition economist at the Antitrust Department of Pavia & Ansaldo and the Directorate-General for Competition (DG COMP) of the European Commission.
Keywords:
antitrust, competition economics, competition law, competition policy
JEL classification:
B21; C01; K21; L00; L4
Year:
2014
Pages:
1-124
Citation:
Samà, Danilo (2014), Essays on economic analysis of competition law: theory and practice, Law & Economics LAB, LUISS “Guido Carli” University, Rome, Italy, pp. 1-124.
Cartel detection and collusion screening: an empirical analysis of the London...Dr Danilo Samà
Cartel detection and collusion screening: an empirical analysis of the London Metal Exchange
Author:
Dr Danilo Samà (LUISS “Guido Carli” University, Law & Economics LAB)
Abstract:
In order to fight collusive behaviors, the best scenario for competition authorities would be the possibility to analyze detailed information on firms’ costs and prices, being the price-cost margin a robust indicator of market power. However, information on firms’ costs is rarely available. In this context, a fascinating technique to detect data manipulation and rigged prices is offered by an odd phenomenon called Benford’s law, otherwise known as First-digit law, which has been successfully employed to discover the “Libor scandal” much time before the opening of the cartel settlement procedure. Thus, the main objective of the present paper is to apply a such useful instrument to track the price of the aluminium traded on the London Metal Exchange, following the allegations according to which there would be an aluminium cartel behind. As a result, quick tests such as Benford’s law can only be helpful to inspect markets where price patterns show signs of collusion. Given the budget constraints to which antitrust watchdogs are commonly subject to, a such price screen could be set up, just exploiting the data available, as warning system to identify cases that require further investigations.
Keywords:
Benford’s law, cartel detection, collusion screening, competition authorities, data manipulation, monopolization, oligopolistic markets, price fixing, variance screen
JEL classification:
C10; D40; L13; L41
Year:
2014
Pages:
1-18
Citation:
Samà, Danilo (2014), Cartel detection and collusion screening: an empirical analysis of the London Metal Exchange, Law & Economics LAB, LUISS “Guido Carli” University, Rome, Italy, pp. 1-18.
The antitrust treatment of loyalty discounts and rebates in the EU competitio...Dr Danilo Samà
The antitrust treatment of loyalty discounts and rebates in the EU competition law: in search of an economic approach and a theory of consumer harm
Author:
Dr Danilo Samà (LUISS “Guido Carli” University, Law & Economics LAB)
Abstract:
In the paper, the fundamental question is under what conditions loyalty discounts and rebates adopted by a dominant firm cause anti-competitive effects. Fidelity schemes, although extremely frequent in the market, if applied by a dominant firm, are likely to be judged as illegal per se, as demonstrated by the EU case-law delivered so far and the severe scrutiny reserved by the national competition authorities. As a result, the paper first provides an analytical overview of loyalty structures, focusing in particular on retroactive rebates, and elaborates on important economic implications, such as the lock-in and the suction effect. The work then discusses the novelties introduced by the Guidance Paper on the Application of Art. 102 of the TFEU, which calls for an effects-based analysis of exclusionary abuses. Therefore, after an in-depth evaluation of the as-efficient competitor test, the new approach of the European Commission towards loyalty discounts and rebates is discussed in details with reference to a controversial antitrust case recently examined at EU level (Tomra). The paper finally proposes a systematic economic framework for analysing the effects, and therefore the legality, of fidelity schemes, in the light of a consistent theory of consumer harm.
Keywords:
fidelity discounts, loyalty rebates, abuse of dominant position, as-efficient competitor test, consumer harm, exclusive dealing, foreclosure, monopolization, nonlinear pricing, predation, Tomra
JEL classification:
K21; L12; L42
Year:
2012
Pages:
1-43
Citation:
Samà, Danilo (2012), The antitrust treatment of loyalty discounts and rebates in the EU competition law: in search of an economic approach and a theory of consumer harm, Law & Economics LAB, LUISS “Guido Carli” University, Rome, Italy, pp. 1-43.
La valutazione antitrust degli sconti fedeltà nel diritto della concorrenza e...Dr Danilo Samà
La valutazione antitrust degli sconti fedeltà nel diritto della concorrenza europeo: alla ricerca di un approccio economico e di una teoria del danno per il consumatore
Author:
Dr Danilo Samà (LUISS “Guido Carli” University, Law & Economics LAB)
Abstract:
L’articolo si propone di comprendere in base a quali condizioni sconti fedeltà adottati da un’impresa dominante comportino effetti anticoncorrenziali. Gli schemi fidelizzanti, infatti, sebbene estremamente frequenti nelle transazioni di mercato, qualora applicati da un’impresa dominante, rischiano di essere giudicati illeciti per sé, come comprovato dalla casistica giurisprudenziale finora emersa a livello europeo e dal severo scrutinio riservato delle autorità nazionali della concorrenza. Il lavoro dapprima fornisce una panoramica analitica delle pratiche fidelizzanti, concentrando in particolare l’attenzione sugli sconti retroattivi, ed approfondisce importanti implicazioni economiche, come gli effetti lock-in e suction. Successivamente vengono discusse le novità introdotte dalle linee guida per l’applicazione dell’Art. 102 TFUE, le quali richiedono un’analisi concreta degli effetti di mercato delle condotte escludenti. Alla luce di un estensivo studio dell’as-efficient competitor test, il nuovo approccio della Commissione Europea verso gli sconti fedeltà viene analizzato in dettaglio con riferimento ad un caso antitrust recentemente esaminato a livello europeo (Tomra). In conclusione, viene sviluppato un approccio economico per l’analisi degli effetti, e dunque della legalità, degli schemi fidelizzanti, in conformità con una coerente teoria del danno per il consumatore.
Keywords:
sconti fedeltà, abuso di posizione dominante, contratti di esclusiva, monopolizzazione, prezzi non lineari, prezzi predatori, teoria del danno, test del concorrente altrettanto efficiente, Tomra
JEL classification:
K21; L12; L42
Year:
2012
Pages:
1-45
Citation:
Samà, Danilo (2012), La valutazione antitrust degli sconti fedeltà nel diritto della concorrenza europeo: alla ricerca di un approccio economico e di una teoria del danno per il consumatore, Law & Economics LAB, LUISS “Guido Carli” University, Rome, Italy, pp. 1-45.
State aid: main developments
Authors:
Ms Alessandra Forzano (European Commission)
Dr Danilo Samà (European Commission)
Abstract:
The Competition Policy Newsletter contains information on EU competition policy and cases. Articles are written by staff of the Directorate-General for Competition of the European Commission.
Editor:
Competition Policy Newsletter
European Commission
Directorate-General for Competition (DG COMP)
Keywords:
competition policy, EU case-law, state aids
JEL classification:
K21; L44
Year:
2012
Pages:
19-25
Citation:
Forzano, Alessandra, Samà, Danilo (2012), State aid: main developments, Competition Policy Newsletter, Vol. 3, Directorate-General for Competition, European Commission, Brussels, Belgium, pp. 19-25.
The Regional Administrative Court of Lazio confirms a fine imposed by the Ita...Dr Danilo Samà
The Regional Administrative Court of Lazio confirms a fine imposed by the Italian NCA against the construction market leader for abuse of dominant position in the plasterboard market (Mercato del cartongesso - Saint-Gobain)
Authors:
Dr Giacomo Luchetta (CEPS - Centre for European Policy Studies)
Dr Danilo Samà (European Commission)
Editor:
Institute of Competition Law (e-Competitions - no. 45898)
Keywords:
abuse of dominance, barriers to entry, dominance, essential facility, geographic market, market definition, market power, relevant market, remedies, unilateral practices
JEL classification:
K21; L44
Year:
2011
Pages:
1-3
Citation:
Luchetta, Giacomo, Samà, Danilo (2011), The Regional Administrative Court of Lazio confirms a fine imposed by the Italian NCA against the construction market leader for abuse of dominant position in the plasterboard market (Mercato del cartongesso - Saint-Gobain), Institute of Competition Law, e-Competitions - no. 45898, Paris, France, New York, United States, London, United Kingdom, pp. 1-3.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
7. 1 Introduction
The ultimate objective of the present paper is to empirically investigate the effec-
tiveness of competition policy in emerging countries. Although its importance is
continuously increasing, the effectiveness of competition policy still seems to lack
the attention that it would deserve. At the present state of art, the number of
academic contributions that attempts to estimate its impact on relevant economic
variables appears very limited, in particular for the less developed countries.
However, an empirical literature aimed at measuring in objective terms the effect of
competition policy on economic growth is emerging, starting from narrow variables
of interest, such as Gross Domestic Product (GDP) and Total Factor Productivity
(TFP).
As a result, the current work intends to contribute to this branch of research,
focusing on broader indicators of market performance, to understand whether the
presence of an antitrust authority has a significant impact, thus an effective utility,
on the level of competition of a developing country. In other terms, the research
question behind the current work is rather straightforward: is a competition
authority active in an emerging country able to implement effectively its primary
role? If not, which are the institutional functions and powers that should be
strengthened?
From a policy perspective, the aim of the present paper is also to comprehend
whether the enforcement of a competition policy regime in a developing country
has the same beneficial effects on the intensity of competition usually claimed to
take place in the most developed countries. At the same time, it may also be
understood whether industrial and institutional differences jeopardize the effec-
tiveness of such a tool of political economy, so much that in emerging countries it
would be worthier to assign funds and priority to other tools for economic
development.
2 Literature Review
According to the mainstream economic school of thought, competition is the critical
process for a market economy to ensure the optimal allocation of resources and the
highest level of social welfare. As it is common knowledge, competitive markets
enable consumers to purchase better products at lower prices and incentivize firms
to improve the quality of the goods and services offered. However, the functioning
of competition is not automatic but must be sustained through an intervention by
the state, which normally occurs with the adoption of a competition legislation and
the creation of a competition authority predisposed to the role of promoter of
market democracy. Nevertheless, despite the general consensus, at least from a
theoretical standpoint, on the necessity of fostering competition in order to support
economic efficiency and fairness on the markets, what appears extremely surprising
is the quasi absence of academic contributions trying to assess empirically the
26 R. Pardolesi and D. Samà
8. effectiveness of competition policy. In the present section, therefore, we provide an
exhaustive overview of the results obtained in the empirical literature.
Dutz and Vagliasindi (2000) are the first authors to overcome the traditional
approach of the literature, based upon subjective indicators limited to an evaluation
of the competition legislations as “in the books”. The authors, in fact, exploiting
cross-sectional data and looking at the actual practice in 18 transition countries,
measure the effectiveness of the different competition policy regimes according to
three criteria (i.e. 1. enforcement; 2. competition advocacy; 3. institutional effec-
tiveness). The main result is a positive impact of competition policy on the intensity
of competition, the latter as captured by an indicator of economy-wide enterprise
mobility. However, the essential drawback of the study remains the low number of
countries for which data are available.
Krakowski (2005), after a regression analysis over a sample of 101 countries,
reaches two main conclusions: firstly, the experience of the competition authority
and the institutional quality of the government explain a substantial part of the
perception of the effectiveness of competition policy; secondly, the perceived
effectiveness of competition policy and the size of the economy have a significant
influence on the perceived intensity of local competition, while the presence of a
protectionist trade policy seems to not have any impact.
Kee and Hoekman (2007), analyzing a dataset of 42 countries and 18 industries
from 1981 to 1998 and controlling for the number of firms and for imports, study
the effect of competition policy on a derived industry mark-up function of price
over marginal cost, which is taken as a proxy for the intensity of competition.
Although no significant impact is found, the authors observe that market entry is
facilitated by the existence of a competition legislation, thus such a legislation has
an indirect and positive effect on the level of domestic competition. The main
drawback of the contribution is that it simply employs a binary variable indicating
whether a competition policy regime is in force.
Waked (2012) focuses on the public enforcement of competition policy in
developing countries, building an original dataset of 50 nations and exploiting 20
antitrust variables over a period of 10 years. The input variables present in the
dataset include information on budget and staffing levels, while the output variables
reflect data such as number of investigations initiated, cases decided, convictions
obtained, sanctions imposed, settlements reached and case appeled for abuse of
dominance, cartel and merger cases. The remarkable merit of the work is the
successful attempt to collect statistical data on the actual enforcement of compe-
tition policy in emerging countries, despite the common belief according to which it
would be an impossible task. The only drawback is the adoption of a resource-based
methodology for the input variables, as well as the employment of descriptive
statistics for the output variables which count the number of interventions by
antitrust authorities. In fact, endowments and resources of competition authorities
are a measure of potential enforcement intensity, while the number of interventions
is not a measure able to judge if the enforcement is efficient or not. Both elements
could be used by developing countries merely to assure and signal compliance to
Is Competition Policy Useful for Emerging Countries … 27
9. international standards. Nevertheless, the main conclusion of the paper still remains,
that is the fact that emerging countries which have adopted a competition policy
regime show an increasing degree of enforcement intensity.
Petersen (2013), using a dataset of 154 countries from 1960 to 2005, finds that
competition policy has a strong effect on the level of GDP after ten years, whilst
there is no relevant impact on the quality of democracy. Thus, market fragmentation
seems neither to favor the transition to a democratic regime nor to strengthen the
stability of an established democracy. The most plausible reason for this might be
that competition policy is not designed to prevent economic concentration at
conglomerate and national level (which, in turn, could promote democracy), but
only in particular and specific sectors. Also here, the main weakness of the study is
that the effect of competition policy is merely controlled for by a dummy variable.
Finally, Buccirossi et al. (2013) estimate the impact of competition policy on
productivity growth, analyzing a sample of 22 industries in 12 OECD countries
from 1995 to 2005. In order to measure the effectiveness of the different compe-
tition policy regimes, the authors construct, principally on the base of a tailored
questionnaire, a set of Competition Policy Indicators (CPIs), assessing, for each
country and each year, the antitrust infringements (the Antitrust CPI), the merger
control process (the Mergers CPI), the institutional features (the Institutional CPI),
the enforcement features (the Enforcement CPI) and all the information on the
competition policy regime in a jurisdiction (the Aggregate CPI). The main con-
clusion consists in a positive and significant relationship between competition
policy and TFP. Although the only drawback of the contribution is the small size of
the sample, exclusively restricted to a part of the OECD countries, the methodology
adopted as well as the indicators built are certainly very useful for further in-depth
analyses and refinements.
3 Dataset Description
In Samà (2014), the empirical assessment has been divided into two main parts. The
first part analyzes developed and developing countries together, to obtain a general
overview of the phenomenon studied. The second part examines exclusively
developing countries, to understand whether the adoption of a competition policy
regime should be among the priorities in the political agenda of an emerging
country. The main reason for this distinction is to disentangle the effect of com-
petition policy in such different contexts. This comparison may provide a better
picture of the impact, also because in developing countries competition policy has
been introduced only recently in comparison to developed countries.
Accordingly, the first group includes the majority of OECD countries (i.e.
28 nations), whilst the second group includes all the developing countries for which
data are available (i.e. 51 nations). Hence, the total number of countries present in
the sample is 79 (by 2008, 111 countries had enacted a competition legislation
28 R. Pardolesi and D. Samà
10. (Papadopoulos 2010). The result is a cross-sectional dataset, created ad hoc
merging several existing datasets, with 2008 as common reference year. For defi-
nitional sake, the term competition policy should be intended as any national law
which promotes market fairness by regulating anti-competitive conducts undertaken
by firms. With competition authority it is meant any institution which is set up for
enforcing competition policy and is not sector specific.
The independent variables of the dataset, i.e. the set of input variables to be
tested in order to verify if they are the cause of the phenomenon object of study,
results from a questionnaire submitted to competition agencies worldwide in 2007
and from which four indicators relative to the institutional quality of competition
policy of each country are derived and used in Voigt (2009). In particular, the
survey, whose response rate is around 63 %, was sent to 140 agencies belonging to
the International Competition Network or participating to the Intergovernmental
Group of Experts on Competition Law and Policy. The questionnaire was con-
structed so that respondents would not have to express personal perceptions but to
provide factual information about the national competition policies.
The dependent variables of the dataset, i.e. the set of output variables to be tested
in order to verify if they are instead the effect of the phenomenon object of study,
results from the Global Competitiveness Report, annually published by the World
Economic Forum (2013). It assesses the class of factors, institutions and policies
that influence the current and medium-term levels of economic prosperity of 144
different countries. Since 2004, the report proposes a wide range of data, based on
110 variables across 12 pillars, about areas such as competition, education, finance,
health, infrastructure, institutions, labour and technology. Data are collected
through over 15,000 surveys with leading business executives who are asked to
rank the determinants of competitiveness of their respective countries. This corre-
sponds to an average of 100 respondents per country. In particular, the study offers
the Global Competitiveness Indexes (GCI) (World Economic Forum 2013) mea-
suring the microeconomic and macroeconomic foundations of national competi-
tiveness worldwide.
In this regard, it is necessary to notice that, at least at the present state of art,
there is a practical impossibility to find objective data about the intensity of market
power, a solution that would represent of course a first best scenario. The basic
reason for this limitation is that data such as level of concentration, mark-up on
prices or number of market entries are available only for specific sectors of certain
nations and in any case would remain rather insignificant if computed with respect
to an entire economy. Thus, it is necessary to proceed to a second best scenario, that
is to resort to indicators of market performance obtained from evaluations expressed
by business respondents about a country competition intensity. Despite the
unavoidable drawbacks that this solution entails, being data extracted from surveys
not perfectly objective, the present paper still intends to investigate at a macro-
economic level whether the presence of a competition authority affects the degree of
competition of a developing country. Future research, having at its disposal more
rigorous and significant data, could certainly provide further answers to the research
question at issue.
Is Competition Policy Useful for Emerging Countries … 29
11. 4 Econometric Model
The econometric model developed in Samà (2014) aims at estimating the effect on
market performance of competition policy in developing countries, the latter
evaluated according to four institutional indicators. These indicators, built in Voigt
(2009) and originally used to assess empirically the impact of competition policy on
TFP, measure: 1. the substantive content of the competition law; 2. the degree to
which the competition law incorporates an economic approach; 3. the formal
independence of the competition authority; 4. the factual independence of the
competition authority. In particular, as mentioned in the previous section, this set of
indicators has been constructed as a result of a questionnaire formed of 30 questions
and submitted to 140 competition authorities worldwide.
As a result, the four institutional indicators, which evaluate the degree of
competition orientation and authority independence, are investigated with respect to
the impact on five indicators of market performance. These five indicators of market
performance, built by the World Economic Forum (2013), measure: 1. the intensity
of local competition; 2. the extent of market dominance; 3. the effectiveness of
anti-monopoly policy; 4. the intensity of national competition; 5. the goods market
efficiency. In particular, as mentioned in the previous section, this set of indicators
has been extracted from the 6th pillar (i.e. Goods Market Efficiency) of the Global
Competitiveness Indexes (GCI).
Accordingly, in the econometric model, the four institutional indicators are
employed as explanatory and independent variables, whilst the five performance
indicators are used as explained and dependent variables. Nevertheless, all the
variables that may affect the relationship between the variables of primary interest
must be monitored, even though they may not be the focus of the study. Control
variables, in fact, allow the econometrician to strictly measure the effect under
examination, avoiding the so-called omitted-variables bias and improving the
goodness of fit of the econometric model. Therefore, along the lines of Voigt
(2009), four standard economic control variables are employed, such as government
consumption, trade openness, rate of inflation (Aten et al. 2002) and patents pro-
tection (U.S. Department of Commerce 2005), under the reasonable assumption that
they are all factors which influence, positively or negatively, the establishment of a
competitive environment. Moreover, two other control variables must be consid-
ered, that are an EU dummy, as the dataset includes countries members of the
European Union, which are thus subject not only to the respective national com-
petition authorities but also to the vigilance exercised by the Directorate-General for
Competition (DG COMP) of the European Commission, and an OECD dummy,
given the higher level of social welfare of OECD countries. The five control
variables are the same regardless of the dependent variable used, since the per-
formance indicators are likely to be affected by similar dynamics.
The high intensity of competition typical of developed countries, as well as the
high extent of market dominance typical of developing countries, might facilitate
the establishment and the effectiveness of a competition authority. This mechanism
30 R. Pardolesi and D. Samà
12. raises the question of endogeneity, as reverse causality (i.e. the effect precedes the
cause, contrary to normal causation) might emerge between the dependent and
independent variables of the econometric model. In order to deal with this issue, a
further category of variables is employed, that are the instrumental variables. In
particular, in the econometric model, the same three instrumental variables are used
for each of the four independent variables. Actually, endogeneity problems may
still remain due to omitted variables. However, to address the omitted variable bias,
several controls are employed as mentioned above.
The first instrument is a dummy variable for former British colonies (Aten et al.
2002). As proved by historical evidence, a common law legal system, typical of
countries that in the past belonged to the British Empire, is more likely to adopt a
competition policy regime compare to a civil law legal system, so that the legal
origin influences the enforcement of an institution such as a competition authority.
The second instrument is the age of democratic regime (Beck et al. 2001), under the
assumption that a country with a longer democratic tradition is in more suitable
conditions to establish and enforce a competition policy regime. The third instru-
ment is the ethnic and linguistic fractionalization (Alesina et al. 2003), element that
traduces the difficulty of implementing valuable institutions.
We can now proceed with the discussion of the estimation phase. At a first step,
the Ordinary Least Squares (OLS) method, without and with control variables, is
employed as estimation technique in order to carry out a preliminary assessment. At
a second step, after evaluating the validity of the instruments chosen through the
Sargan test, the Two-Stage Least Square (2SLS) and the Generalized Method of
Moments (GMM) are employed as estimation techniques, being able to improve the
prediction quality of the econometric model exploiting the information provided by
the instruments.
5 Estimation Results
In order to obtain a general overview of the phenomenon object of the study, firstly
developed and developing countries are analyzed together. Table 1 contains the
OLS regression estimates without and with the standard economic control variables.
It can observed that all the institutional indicators present the expected sign, that is
competition policy has a positive impact on all the performance indicators, although
rather marginal but more significant when control variables are considered. This
means that competition authorities, even if to a limited extent, are usually able to
implement effectively the role of promoters of fair competition. From Table 2,
which contains instead the OLS regression estimates over developing countries
only, we can observe that only the formal independence of the competition
authorities impacts positively on the performance indicators, while the degree to
which the competition law incorporates an economic approach and the formal
independence of the competition authority present a significant impact in a limited
Is Competition Policy Useful for Emerging Countries … 31
17. number of cases. On the contrary, the fact that an emerging country has adopted a
specific legislation safeguarding competition seems to not have any effect on the
markets.
For a more sophisticated inference analysis based on estimation methods such as
2SLS and GMM it is necessary first of all to check the relevance of the instruments
chosen. In an overidentified model, where the number of instrumental variables
exceeds the number of explanatory variables, the Sargan’s test can be used to verify
the validity of the instruments selected. The validity of the instruments for all four
institutional indicators of both developed and developing countries has been pos-
itively tested. Consequently, even though this test has low power and provides no
guarantee that the instruments used are valid, it brings further evidence to support
the direction of the model’s results.
Proceeding with the more advanced estimation techniques, from Table 3, which
contains the 2SLS and GMM regression estimates for the entire sample, we can
observe results that confirm those obtained under OLS. Although the substantive
content of the competition law seems to lose statistical significance, what emerges,
and this is more important for our purposes is that the estimates for the other three
institutional indicators are stronger than those obtained through the OLS estimation,
reaching in several cases the standard significance level of 5 %. Instead, from
Table 4, which presents the 2SLS and GMM regression estimates only for the
subsample of developing countries, we can observe results that confirm as well
what is stated in Table 2, that is the fact that in emerging countries the factual
independence of competition authorities seems to matter most. Furthermore, the
impact of the formal independence of competition authorities appears strengthened
in comparison to that one obtained through the OLS estimation, whilst the presence
of economists still maintains a positive effect in some cases.
6 Conclusions
In the present paper, the aim has been to investigate the effectiveness of competition
policy in developing countries from an empirical standpoint. It has shown that four
competition indicators, originally built to explain differences in productivity, once
controlled with the proper economic and institutional variables, seem to have an
effect on five market indicators. Although not particularly strong, the presence of a
competition authority increases the degree of competition of a country.
In particular, two main results are worth recapping. Firstly, as a general trend,
apart from the mere adoption of a competition legislation by the national parlia-
ments, all the institutional indicators exercise a positive impact on the markets,
therefore competition authorities seem to be effective in enhancing the level of
competitiveness of the respective countries. Secondly, as for the poorest countries,
with respect to which we are interested in verifying whether the enforcement of a
competition policy regime should be favored, what seems to be the most important
factor for its effectiveness is the factual independence of the authorities predisposed.
36 R. Pardolesi and D. Samà
18. The essential reason for this should be that the quality of the institutions of
developing countries is certainly lower than the one of the industrialized nations,
being affected more frequently for example by cases of corruption or government
interference. In any case, one conclusion seems certain, that is competition policy is
not harmful to development.
However, emerging countries, historically characterized by the nationalization of
basic industries, are still adopting or constructing primordial competition policy
frameworks, whose results could be seen only in delay, so in the near future.
Actually, to be more precise, 81 of the 111 of the existing competition authorities
worldwide have been created only in the last twenty years. Moreover, private
enforcement, although still in an embryonic phase even in the developed countries,
could undoubtedly make the market surveillance, thus the market efficiency,
stronger.
As a result, in developed countries competition policy has actually beneficial
effects on the intensity of competition, result so far unclear and often claimed only
on the paper or taken for granted, while in developing countries is not the mere
existence or the degree of competence, but the institutional quality of the compe-
tition authorities matters most for the effectiveness of a competition policy regime.
In both cases, therefore, the creation of a competition authority is definitely worth,
even though its functions and powers should be strengthened in order to register a
more significant impact on the markets in comparison to the current results. Future
research, exploiting more precise data that we hope will be available soon (e.g.
panel data concerning specific sectors and not as here cross-sectional data related to
an entire economy), could certainly offer further support to the conclusions here
reached.
Acknowledgments The authors, who remain the only responsible for the views expressed, would
like to thank Dr. Giacomo Luchetta for the kind comments and suggestions offered and Prof.
Stefan Voigt for the access to the dataset hereby indicated as Voigt (2009). For an in-depth
analysis of the econometric model, see Samà, D. (2014), The Effectiveness of Competition Policy:
An Econometric Assessment in Developed and Developing Countries, Working Paper.
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