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Competition, Innovation, and Inclusive Growth
Author:
Reda Cherif
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and
Fuad Hasanov
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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 080
Language:
English
Publication Date:
19 Mar 2021
DOI:
https://doi.org/10.5089/9781513574172.001
ISBN:
9781513574172
ISSN:
1018-5941
Pages:
28
Keywords:
Inequality; inclusive growth; competition; market power; innovation; Big Tech; rise of market power; growth policy; firm markup; superstar firm; panel data; Income inequality; Income; Productivity; Sub-Saharan Africa; laggard firm; market concentration; frontier firm; state intervention; firms enter; innovation policy; competition policy; productivity gain
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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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. However, 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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund