Competition, Innovation, and Inclusive Growth
IMF Working Papers, March 19, 2021
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- Competition, Innovation, and Inclusive Growth
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Bibliographic details
- Authors: Reda Cherif, Fuad Hasanov
- Published: March 19, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513574172.001
Overview
- We provide an overview of the theories and empricial evidence on the complex relationship among innovation, competition, and inclusive growth.
- Competition and innovation-led growth are critical to drive productivity gains and support broad-based growth.
- New technologies and trends in market concentration are stifling future innovation while contributing to the marked increase in inequality.
- Beyond consumer welfare in a narrow market, competition policy should adapt to this new reality by considering the spillover and dynamic effects of market power, especially on firm entry, innovation, and inequality.
- Innovation policies should tackle not only government failures but also market failures.
Key findings and themes
- Competition and innovation-led growth drive productivity gains and support broad-based growth.
- New technologies and trends in market concentration:
- are stifling future innovation;
- contribute to the marked increase in inequality.
- Market power has spillover and dynamic effects on:
- firm entry;
- innovation;
- inequality.
- Innovation policy should address both:
- government failures;
- market failures.
Policy implications and recommendations
- Competition policy should:
- move beyond focusing solely on consumer welfare in a narrow market;
- consider spillover and dynamic effects of market power on entry, innovation, and inequality.
- Innovation policy should:
- tackle not only government failures but also market failures.
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- Working Paper