Competition Policy and its Impact on Innovation and Competitiveness

Abstract

This paper seeks to analyse the policy framework governing competition and competitiveness in the era of globalization, liberalization and increasing deregulation of policy governing capital, and enterprises. Set in the context of the current set up, where 'efficiency' is the key word, and being competitive is a key objective for most enterprises of all economies, this paper seeks to analyse the need and relevance of having a competition policy, its benefits, the existing ambiguities in policy, and the necessary amendments which need to be made, so as to arm the economy and the government with a competent institutional mechanism to tackle the emerging challenges of an increasing restriction-less world, and its implications for developing countries like India, specifying the challenges and needs of these countries. Our paper discusses the parameters and factors affecting competitiveness and those discussed in Competition Policy. This paper aims at linking the above-mentioned analyses of competition policy in a broader context. It talks about its effects on competitiveness and growth of developing countries, with an incorporation of the ongoing WTO negotiations. The benefits and the potential harm cause by the adaptation of the 'developed country' competition policies in developing countries at different stages of economic and institutional development is also discussed. Also analysed is the behavior of large international corporations in the current wave of financial consolidation and its potential effects on competition and welfare.

Keywords: Competitiveness, Competition Policy, Competition Act

JEL Classification: F1, F12, K23