Balancing Industrial Concentration and Competition for Economic Development in Asia: Insights from South Korea, China, India, Indonesia and the Philippines

Authors

  • Ronald Umali Mendoza Asian Institute of Management 123 Paseo De Roxas Avenue Makati City, Philippines 1229
  • Lai-Lynn Angelica Barcenas Asian Institute of Management
  • Padmini Mahurkar Asian Institute of Management

DOI:

https://doi.org/10.6000/1929-7092.2013.02.20

Keywords:

Industrial policy, competition, import substitution, concentration, productivity

Abstract

In pursuit of economic growth and development, countries have tried to strike a balance between competition and industrial policies across time. This paper will review the empirical evidence on industrial concentration and its economic correlates (notably firms' performance as measured by profitability, factor productivity and innovation). It will also analyze how the introduction of competition policies and laws in South Korea, China, India, Indonesia and the Philippines affected industrial concentration. It will examine at what point in their industrialization and economic development these economies implemented these laws and policies. The empirical literature suggests that industrial concentration could exhibit an inverted-U-shaped relationship as far as its link to certain economic indicators of success, such as productivity and innovation. This suggests a role for recalibrating policies to adjust the balance between industrial concentration and competition, so that the over-all outcomes are net welfare enhancing. Indeed, country policy experiences reviewed here appear to demonstrate this recalibration, notably following privatization and liberalization policies.

Author Biography

Ronald Umali Mendoza, Asian Institute of Management 123 Paseo De Roxas Avenue Makati City, Philippines 1229

RONALD U. MENDOZA, PH.D. Executive Director, AIM Policy Center Associate Professor of Economics Asian Institute of Management (AIM) 123 Paseo de Roxas, Makati City 1260 Philippines Mobile: (011-63) 927-8636933 Skype: ronmendoza1E-mail: rumendoza@aim.edu Web: http://policy.aim.edu

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Published

2013-07-02

Issue

Section

Articles