--- canonical_url: "https://csls.ca/research/competitive-intensity-as-driver-of-innovation-and-productivity-growth-a-synthesis-of-the-literature/" title: "Competitive Intensity as Driver of Innovation and Productivity Growth: A Synthesis of the Literature" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-02T13:41:06+00:00" date_modified: "2026-07-02T13:41:06+00:00" post_type: "research" summary: "" post_tag: - "Canada" - "competition policy" - "competitive intensity" - "firm dynamics" - "innovation" - "market concentration" - "productivity" country_focus: - "Canada" province_region: - "National" research_theme: - "Productivity and Economic Measurement" - "Technology and Innovation" featured_image: "https://csls.ca/wp-content/uploads/2026/07/old-reports_hero_banner_bg.webp" status: "publish" --- # Competitive Intensity as Driver of Innovation and Productivity Growth: A Synthesis of the Literature Canonical URL: https://csls.ca/research/competitive-intensity-as-driver-of-innovation-and-productivity-growth-a-synthesis-of-the-literature/ # Competitive Intensity as Driver of Innovation and Productivity Growth: A Synthesis of the Literature [Download full PDF report](https://csls.ca/pdf/csls2008-03.pdf) Cite this report × Cite this report as: Sharpe, Andrew, and Ian Currie. 2008. “Competitive Intensity as Driver of Innovation and Productivity Growth: A Synthesis of the Literature.” CSLS Research Report 2008-03. Ottawa: Centre for the Study of Living Standards. https://csls.ca/research/competitive-intensity-as-driver-of-innovation-and-productivity-growth-a-synthesis-of-the-literature/ ## Authors: - Andrew Sharpe Centre for the Study of Living Standards (CSLS) - Ian Currie Centre for the Study of Living Standards (CSLS) ## Report 2008-03 June 2008 80 pages ## Related research [Measuring the Appropriate Outcomes for Better Decision-Making: A Framework to Guide the Analysis of Health Policy Matthew Calver March 2016 | Report 2016-03 | 132 pages](https://csls.ca/research/measuring-the-appropriate-outcomes-for-better-decision-making-a-framework-to-guide-the-analysis-of-health-policy-2016-03/) [Living Standards Domain of the Canadian Index of Wellbeing Andrew Sharpe, Christopher Ross November 2011 | Report 2011-17 | 124 pages](https://csls.ca/research/living-standards-domain-of-the-canadian-index-of-wellbeing-2011-17/) [Productivity: Key to Economic Success Centre for the Study of Living Standards (CSLS) March 1998 | Report 1998-01 | 99 pages](https://csls.ca/research/productivity-key-to-economic-success/) [Apprenticeship in Canada: A Training System Under Siege? 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The report is divided into three main parts. The first part examines the state of economic theory on the relationship between competitive intensity, innovation and productivity. The second section examines relevant empirical work that has been done on the role of firm dynamics in sustaining a competitive environment. The third section surveys evidence of linkages provided by the international case studies of the effects of open and competitive markets on innovation and productivity. The report concludes that the weight of the evidence indicates that competitive intensity has a strong positive effect on innovation and productivity. Accordingly, Canada should pay closer attention to the competitive implications of public policy than has been the case in the past. The international experience provides strong support for this conclusion. While there can be negative implications for certain groups from such policy changes, the evidence shows that they are often smaller than anticipated. Restrictions on competition should only be allowed when it can be demonstrated that they are needed to achieve overriding societal interests. L’objectif de ce rapport est de recenser et d’évaluer la littérature théorique économique existante et les données empiriques sur les liens entre des marchés ouverts et concurrentiels (l’intensité concurrentielle) et la croissance de l’innovation et de la productivité. Le rapport se divise en trois grandes parties. La première examine l’état de la théorie économique sur la relation entre l’intensité concurrentielle, l’innovation et la productivité. La deuxième section examine les travaux empiriques pertinents portant sur le rôle de la dynamique des entreprises dans le maintien d’un environnement concurrentiel. La troisième section recense les données probantes issues d’études de cas internationales sur les effets des marchés ouverts et concurrentiels sur l’innovation et la productivité. Le rapport conclut que la prépondérance des données probantes indique que l’intensité concurrentielle a une forte incidence positive sur l’innovation et la productivité. Par conséquent, le Canada devrait accorder une attention plus soutenue aux répercussions concurrentielles des politiques publiques qu’il ne l’a fait par le passé. L’expérience internationale appuie fortement cette conclusion. Bien que de tels changements de politique puissent avoir des conséquences négatives pour certains groupes, les données montrent que celles-ci sont souvent moins importantes que prévu. Les restrictions à la concurrence ne devraient être autorisées que lorsqu’il peut être démontré qu’elles sont nécessaires pour atteindre des intérêts sociétaux supérieurs. [Download full PDF report](https://csls.ca/pdf/csls2008-03.pdf)