Estimating the economic impact of the Office for Competition on the Maltese economy

Abstract

The Office for Competition in Malta is the leading administrative competition authority responsible for promoting sound competitive practices for attaining and maintaining well-functioning markets. This study quantifies the economic benefits on the Maltese economy via an economic impact assessment for the designated roles of the Office for Competition. Through an application of time-series econometrics, input-output modelling framework and the OECD’s guidelines to conduct such assessments, this study explores the direct and indirect multiplier effects that accrued on the Maltese economy as a result of the Office’s control of concentrations activities between 2014 and 2018. This study finds that the estimated financial benefit to the Maltese economy in terms of GDP averaged €10.2 million per year, €7.1 million in direct effects and €3.1 million in indirect benefits. This equates to a direct benefit-to-costs ratio of 30.4:1. This study should aid Maltese authorities in gauging the rate of return from the annual budget allocated to the Office for Competition and increase awareness of the benefits of competition law and policy.