Competition, Innovation, and Inclusive Growth

Reda Cherif and Fuad Hasanov

No 2021/080, IMF Working Papers from International Monetary Fund

Abstract: 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.

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 (search for similar items in EconPapers)
Pages: 28
Date: 2021-03-19
New Economics Papers: this item is included in nep-com, nep-ino, nep-reg, nep-sbm and nep-tid
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Citations: View citations in EconPapers (2)

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