Financial development leads to more competitive markets, benefiting consumers worldwide.
Financial constraints can affect competition in markets. A study looked at how finance impacts competition using a model. They found that in sectors relying on finance, more financial development can lead to lower prices and more competition, even if there are fewer firms. This means that just because a company is already established doesn't mean it will benefit from financial changes. Also, poorer countries tend to have less competitive markets due to imperfect financial systems.