The impact of competition policy on the national economy of a country with a developing culture of competition

Abstract

The article provides a theoretical and empirical analysis of the impact of competition policy on the national economy of a country with a developing culture of competition, through the effects of competition policy and the impact of deterrence of sanctions for breaches of competition. The theoretical analysis has revealed a positive relationship between a successful implementation of competition policy and the country's economic development. The article reviews the situation related to the implementation of competition policy in countries with developing/emerging culture of competition - Lithuania and Latvia. The empirical study is based on quantitative and qualitative research. The quantitative research has analyzed and evaluated the impact of competition policy on the economy through its operational based on the examples of Lithuania and Latvia. The qualitative research has analyzed and evaluated the impact on the economy through the impact of the deterrence of sanctions for violations of competition based on the case study of Lithuania. During the qualitative research a correlation analysis was performed between the indicators reflecting the areas of manifestation of the impact of competition policy (causes) and the indicators that reflect the impact of competition policy (result/outcome) and, simultaneously, the status of national economy. The analyzed period - 2005 – 2016. During the qualitative research 89 economic entities from all over Lithuania were surveyed: companies and entities from the public sector. Empirical research included participation of companies from the sectors where, according to the scientists and reports, the likelihood of violation of competition is higher. The survey was conducted in December 2016 - May 2017. Quantitative research has shown that competition policy in countries with a developing/emerging culture of competition is mostly manifested through the same areas as in countries with a developed competition culture: the areas of innovation, investment, international trade and human resources, i.e. for ensuring competition in the market, economic entities are encouraged to implement innovation, invest, develop international trade and human resources, which, as a result of all this, leads to the increase in labor productivity, economic growth, national competitiveness, lower prices and better business conditions. Qualitative research has shown that there is a positive tendency within countries with a developing/emerging culture of competition, that more and more economic entities are ready to compete fairly, and the competition itself is considered as a value. In addition, while the deterrence from violations of competition law in countries with a developing/emerging competition culture is lower than in countries with a developed competition culture, the impact of an effective competition policy on the reduction of and deterrence from the intentions to violate competition is apparent

DOI: http://dx.doi.org/10.5755/j01.ee.29.1.18905