Competition causes suppliers of goods and services to lower prices, raise quality, and innovate. It is crucial for maximizing social welfare in a market economy. Ironically, however, the market by itself does not guarantee competition, unless one makes heroic assumptions about the costlessness of market entry (North 1981; Neumann 2001: 5ff.). As Adam Smith famously warned, ‘people of the same t...

Utilizing economic theory, this paper tests the proposition that intellectual property rights and competition policy are complementary policies. An ordered probit model is applied to a sample of over 4,000 firms in 36 countries in order to estimate the marginal effects of the use and quality of enforcement of intellectual property rights on a measure of the degree of seriousness of competition ...