Competition laws drive domestic competition by boosting entry of firms.
Competition laws have been getting stronger in many countries, while imports are putting more pressure on local industries. A study looked at how competition laws affect competition in different industries. They found that industries with more imports or more local companies tend to be more competitive. Interestingly, the direct impact of competition laws on competition itself is not very significant. However, industries that follow competition laws tend to have more local companies, suggesting that these laws indirectly promote more competition by encouraging new businesses to enter the market.