Estimation of Antimonopoly Policy Effectiveness: Cross-Country Comparisons and Factor Analysis

Competition encourages companies to offer goods and services to consumers on the most favorable terms, stimulates effectiveness and innovations and reduces prices. Since competition is not able to self-regulate, most countries have already adopted antitrust legislation. In this paper we estimate the effectiveness of antitrust legislation in countries. Methodology is focused on the analysis of influence of objective antitrust law indicators in 2010 on the intensity of competition and market concentration using the ordinary least squares method and the method of instrumental variables. In addition, the analysis is supplemented by the estimation of impact of a more subjective indicator of antimonopoly policy and control variables on the same dependent variables in the period 2007-2017 using panel data methods. The influence of the competition law index on the dependent variables was not confirmed, but the models with the antimonopoly policy indicator have the opposite results. The confirmed influence of the quality of the antimonopoly legislation, rather than the breadth of its enforcement, help to introduce an effective antitrust policy that allows to achieve the objectives of the antimonopoly legislation.