Domestic Competition, Cyclical Fluctuations, and Long-Run Growth in Hong Kong Sar
IMF Working Papers, August 1, 2000
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- Domestic Competition, Cyclical Fluctuations, and Long-Run Growth in Hong Kong Sar
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Bibliographic details
- Authors: Eric Zitzewitz
- Published: August 1, 2000
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451856248.001
Summary
- This paper provides an empirical assessment of the degree of competition in Hong Kong SAR using industry-level data.
- Due to data limitations only approximate measures of competitiveness can be estimated.
- The results 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 made Hong Kong SAR slightly less competitive on average.
- Imperfect competition is not leading to counter-cyclical markups and slower price adjustment as some theories predict; instead, markups are more pro-cyclical than in OECD countries.
- 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.
Key findings (empirical)
- Hong Kong SAR competitiveness is comparable to a typical OECD economy.
- Shift toward services over the last decade has slightly reduced average competitiveness in Hong Kong SAR.
- Markups in Hong Kong SAR are more pro-cyclical than in OECD countries.
- Imperfect competition causes a significant downward bias in growth accounting estimates of total factor productivity when comparing Asian NICs with OECD countries.
Methodology and limitations
- Industry-level data are used to estimate the degree of competition.
- Data limitations restrict the analysis to approximate measures of competitiveness.
Subjects and keywords
- Subject: Competition, Economic sectors, Financial markets, Labor, Labor share, Manufacturing, Production, Total factor productivity
- Keywords: AC ratio, Competition, competitiveness, cyclical fluctuations, growth, Hong Kong SAR, imperfect competition, Labor share, Manufacturing, Markups, P-AC margin, P-MC, P-MC margin, Sar, SAR-OECD sample, Total factor productivity, WP
Source: IMF Working Papers (Working Paper No. 2000/142) — Eric Zitzewitz, August 1, 2000.
Content in this bundle
- Domestic Competition, Cyclical Fluctuations, and Long-Run Growth in Hong Kong SAR-WP/00142