Competition in the Netherlands; an analysis of the period 1993-2001

These findings are puzzling in light of regulatory reforms that have been implemented in the period observed. Yet, econometric analysis suggests that regulatory reforms could have intensified competition. However, strong growth of market demand has weakened competition and it counterbalanced to some extent the impact of regulatory reforms. If demand grows more rapidly than supply, then incumbent firms compete less aggressively. This should attract new competitors if entry barriers are low. Although entry has a positive effect on competition, its contribution has been negligible or even slightly negative. The analysis is based on two competition indicators. The model considerably explains the development of both indicators at the industry level. However, several determinants have statistically insignificant coefficients, particularly the estimated coefficients of entry and exit rates.