Competition, Competitiveness and Growth in Sub-Saharan Africa

IMF Working Papers, February 14, 2020

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Canonical URL: Competition, Competitiveness and Growth in Sub-Saharan Africa

Authors: Reda Cherif, Sandesh Dhungana, Xiangming Fang, Jesus R Gonzalez-Garcia, Yuanchen Yang, Mustafa Yenice, Jung Eun Yoon
Published: February 14, 2020
Series: IMF Working Papers
DOI: https://doi.org/10.5089/9781513526379.001

Research question: Does greater product market competition improve external competitiveness and growth?
Data: country- and firm-level data for a sample of 39 sub-Saharan African countries over 2000–17, as well as other emerging market economies and developing countries.
Authors: Reda Cherif, Sandesh Dhungana, Xiangming Fang, Jesus R Gonzalez-Garcia, Yuanchen Yang, Mustafa Yenice, Jung Eun Yoon.
Publication date: February 14, 2020.
Publication details:
- Series: Working Paper No. 2020/030
- Issue: 030
- Pages: 48
- DOI: https://doi.org/10.5089/9781513526379.001
- ISBN: 9781513526379
- ISSN: 1018-5941

Growth and competitiveness
- An improvement in domestic competition is associated with a signficant increase in real GDP per capita growth rate.
- The growth effect is achieved mainly through an improvement in export competitiveness and productivity growth.
Prices
- Price levels, including of essential items, are generally lowered with an increase in competition.
Firm-level effects
- Greater competition—proxied through a decline in corporate market power—is associated with an increase in firms’ investment and the labor’s share in output.
- These firm-level effects are more pronounced in the manufacturing sector and among domestic firms compared to foreign firms.

Enhancing domestic product market competition can be a channel to raise real GDP per capita growth, primarily via export competitiveness and productivity gains.
Policies that reduce corporate market power may increase firm investment and the labor share, supporting broader-based growth.
Competition-enhancing reforms may also help lower price levels for essential items, with potential distributional benefits.

Subject: Commodity markets, Competition, Emerging and frontier financial markets, Financial markets, Labor, Labor share, Production, Productivity
Keywords: Africa, Commodity markets, Competition, competition indicator, cost minimization problem, Emerging and frontier financial markets, enterprise data, firm Dynamics, firm markup, firm profitability, firm-level indicators, Global, Labor share, Market Power, Markups, Productivity, Sub-Saharan Africa, WP

Source: IMF Working Paper "Competition, Competitiveness and Growth in Sub-Saharan Africa", February 14, 2020; Working Paper No. 2020/030.