This paper examines the relationship between competition, innovation and productivity for the Netherlands. We use … industry level. We find strong evidence for a positive impact of competition on Total Factor Productivity (TFP) at the industry … level. Competition directly increases TFP by reducing X-ineficiencies and removing inefficient forms from markets, but also …

We show that competing firms relax overall competition by lowering future barriers to entry.We illustrate our findings …-period profits.This dampens competition for serving the first-period market. …