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Domestic Competition, Cyclical Fluctuations, and Long-Run Growth in Hong Kong Sar
Author: Mr. Eric Zitzewitz
Series:
IMF Working Papers
Volume/Issue:
Volume 2000: Issue 142
Language:
English
Publication Date:
01 Aug 2000
DOI:
https://doi.org/10.5089/9781451856248.001
ISBN:
9781451856248
ISSN:
1018-5941
Pages:
40
Keywords:
WP; Sar; P-AC margin; P-MC; Markups; competitiveness; cyclical fluctuations; growth; Hong Kong SAR; P-MC margin; SAR-OECD sample; AC ratio; imperfect competition; Competition; Manufacturing; Total factor productivity; Labor share
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper provides an empirical assessment of the degree of competition in Hong Kong SAR using industry-level data. Although due to data limitations only approximate measures of competitiveness can be estimated, the results do suggest that Hong Kong SAR is as competitive as a typical OECD economy. The dramatic shift of the economy toward services over the last decade has also made it slightly less competitive on average. Imperfect competition is not leading to counter-cyclical markups and slower price adjustment as some theories predict, however, since markups are more pro-cyclical than in OECD countries. Lastly, markups are sufficiently imperfectly competitive in both Hong Kong SAR and the OECD to significantly downwardly bias growth accounting estimates of total factor productivity in Asian NICs vis-à-vis OECD countries.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund