Does competition have a relationship with efficiency and productivity?

  • EK˙IN AKDEN˙IZ
Keywords: Efficiency, Productivity, Competition

Abstract

Aim: The purpose of this research is to determine whether or not there is a correlation between the level of competition in a given competition and the level of efficiency or productivity achieved by that market. With this in mind, the study’s primary objective is to determine whether or not intense competition affects efficiency and productivity.
Method: The current investigation takes a descriptive approach to its presentation of data. Information was gathered from books and articles already published. The findings were derived from a comparative analysis.
Findings: When competition is healthy, the market sends firms clear signals (such as the prices they can charge and the profits they can earn) about the goods and services consumers want to purchase. Therefore, it can be said that competitiveness is linked to effectiveness and output.
Implications/Novel Contribution: The importance of the study is articulated through the connection between the three concepts of competition, efficiency, and productivity, which are not fully developed in the papers cited in the literature review. The presented relationship with the existing literature review can be dealt with in future studies, and unfavorable aspects of the relationship can also be embraced.

References

Bakırcı, F. (2006). A measurement of efficiency on sectoral basis: An analysis with DEA. Atatürk University: Journal of Economics and Administrative Sciences, 20(2), 199-217.

Balkan, D., & Arıkan, M. (2010). Measuring secondary school education efficiencies of Sivas by data envelopment analysis. Cumhuriyet University Journal of Economics and Administrative Sciences, 11(2), 133-154.

Beatson, M., & Zheltoukhova, K. (2015). Productivity: Getting the best out of people (Technical report). Chartered Institute of Personnel and Development, Policy Report, United Kingdom.

Burkhead, J., & Hennigan, P. J. (1978). Productivity analysis: A search for definition and order. Public Administration Review, 38(1), 34-40. doi:https://doi.org/10.2307/975408

Çetin, T. (2010). An essay on economic efficiency: X efficiency approach. Do˘gu¸s University Journal, 11(2), 183-198. doi:https://doi.org/10.31671/dogus.2019.161

Competition and Markets Authority. (2015). Productivity and competition: A summary of the evidence (Technical report). CMA45, United Kingdom.

Demsetz, H. (1973). Industry structure, market rivalry, and public policy. The Journal of Law and Economics, 16(1), 1-9. doi:https://doi.org/10.1086/466752

Dinç, M., & Haynes, K. E. (1999). Sources of regional inefficiency: An integrated shift-share, data envelopment analysis and input-output approach. The Annals of Regional Science, 33(4), 469-489. doi:https://doi.org/10.1007/s001680050116

Dogan, N., & Ersoy, Y. (2017). Efficiency measurement: A case study of a firm in the textile sector. ˘ Hitit University Journal of of Social Sciences Institute, 10(1), 35-44. doi:https://doi.org/10.17218/hititsosbil.285265

Dogan, Ö. ˘˙I., Marangoz, M., & Topoyan, M. (2003). Factors affecting competitive advantage of businesses in domestic and foreign markets and an application. Dokuz Eylül University: The Journal of Graduate School of Social Sciences, 5(2), 114-138.Eroglu, E., & Atasoy, M. C. (2006). Efficiency measurement with data envelopment analysis and sensitivity analysis ˘ of the efficient decision making units. Istanbul University Journal of the School of Business Administration, 35(2), 73-89.

Esirgen, H. B., & Gültekin, T. A. (2005). Evaluation of reinforced concrete and structural steel construction technologies by productivity criteria. Journal of the Faculty of Engineering and Architecture of Gazi University, 20(4), 507-516.

Florina, P. (2017). Elements on the efficiency and effectiveness of the public sector. Ovidius University Annals, Economic Sciences Series, 17(2), 313-319.

Göçer, ˙I., & Peker, O. (2014). Productivity effects of foreign direct investment: A comparative cointegration analysis with multiple structural breaks in Turkey, China and India sample. Verimlilik Dergisi, 1, 7-40.

Gökmenoglu, S. M., Akal, M., & Altunı¸sık, R. (2012). A review on factors determining national competitiveness. ˘ Competition Journal/Rekabet Dergisi, 13(4), 3-43.

Güngör, B., & Felekoglu, B. (2018). The concept, development and implementation process of eco-efficiency. ˘Journal of Balıkesir University Institute of Science and Technologys, 20(3), 90-104. doi:https://doi.org/10.25092/baunfbed.481167

Holmes, T. J., Hsu, W.-T., & Lee, S. (2014). Allocative efficiency, mark-ups, and the welfare gains from trade. Journal of International Economics, 94(2), 195-206. doi:https://doi.org/10.1016/j.jinteco.2014.07.002

Jacobs, R. (2001). Alternative methods to examine hospital efficiency: Data envelopment analysis and stochastic frontier analysis. Health Care Management Science, 4(2), 103-115. doi:https://doi.org/10.1023/A:1011453526849

Keskin, H., Kalaycıoglu, O., & ˘˙Ince, H. (2017). Relationship between export capabilities and competitive advantage: An empirical investigation on Turkish exporters. Dogus University Journal, 18(2), 51-68. doi:https://doi.org/10.31671/dogus.2018.31

Lorcu, F. (2010). Malmquist productivity index: An application of Turkish automotive industry. Istanbul University Journal of the School of Business Administration, 39(2), 276-289.

Lovell, C. K. (2003). The decomposition of Malmquist productivity indexes. Journal of Productivity Analysis, 20(3), 437-458. doi:https://doi.org/10.1023/a:1027312102834

McGlynn, E. A., Shekelle, P. G., Chen, S., Goldman, D., Romley, J., Hussey, V. H., P., . . . Shanman, R. M. (2008). Identifying, categorizing, and evaluating health care efficiency measures. Retrieved from https://bit.ly/2oLNxqa (Accessed on 15 September, 2018)

Nickell, S. J. (1996). Competition and corporate performance. Journal of Political Economy, 104(4), 724-746. doi:https://doi.org/10.1086/262040

Öngüt, Ç. E. (2007). Turkish textile and clothing industry’s adaptation to the changing competitive conditions. Istanbul, Turkey: Devlet Planlama Te¸skilatı.

Özden, Ü. (2008). Data Envelopment Analysis (DEA) by measuring the activity of the foundation universities in Turkey. Istanbul University Faculty of Business Journal, 37(2), 167-185.

Prokopenko, J., & North, K. (1996). Productivity and quality management: A modular programme - part i: High potential productivity and quality improvement areas. Tokyo, Japan: Asian Productivity Organization.

Rogers, M. (1998). The definition and measurement of productivity (Working Paper no 9/98). Melbourne Institute of Applied Economic and Social Research, Melbourne, Australia.

Salant, Y., & Siegel, R. (2016). Reallocation costs and efficiency. American Economic Journal: Microeconomics, 8(1), 203-227. doi:https://doi.org/10.1257/mic.20140262

Schaeck, K., & Cihák, M. (2008). ˘ How does competition affect efficiency and soundness in banking? New empirical evidence (Working paper no 932). European Central Bank , Frankfurt, Germany.

Seviçin, A. (2009). An investigation on sustainable competitive advantage concept. Zonguldak Karaelmas University Journal of Social Sciences, 5(10), 171-185.

Steindel, C., & Stiroh, K. J. (2001). Productivity: What is it, and why do we care about it? (Technical report). FRB of New York, New York, NY.

Van Reenen, J. (2011). Big ideas: How competition improves management and productivity. Centrepiece, 16(1),10-13.

Varian, H. R. (1974). Equity, envy, and efficiency. Journal of Economic Theory, 9(1), 63-91.

Vergil, H., & Abasız, T. (2008). Total factor productivity, estimation and relationship between growth and productivity. Kocaeli University Journal of Social Sciences, 16(1), 160-188.

Vickers, J. (1995). Concepts of competition. Oxford Economic Papers, 47(1), 1-23. doi:https://doi.org/10.1093/oxfordjournals.oep.a042155

Yerlikaya, Ö. (2010). Technical efficiency as a component of total factor productivity: An empirical study on private manufacturing industry of Turkey with stochastic production frontiers. Istanbul Sosyal Bilimler Dergisi, 2, 45-54.

Yükçü, S., & Atagan, G. (2009). Complexity created by the concepts of effectiveness, efficiency and productivity. ˘Ataturk University Journal of Economics and Administrative Sciences, 23(4), 1-13
Published
2019-08-19
Section
Articles