Page 13 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 1, 2014, pp. 4-25

development of anti-competitive start. Regardless of what mechanism is significant,

demonopolization does not directly enhance competition in markets with easy entrance.

In order to emerge and build long-term competition relationships in the market, there are

three conditions which have to be followed i.e. access to the market have to be on time; it needs

to be large-scale and this should occur when the number of rivals in the market are perceived to

be less. Operation in the market with limited “access” may necessiate expansion of the scope of

enterprise beyond the relevant market with a view to create new enterprise or new production

within the boundaries of the market.

Markets in countries where sweeping reforms are implemented meet these conditions less

than those in developed market economy. Even, if particular products are featured by easy

production and offer for sale (low initial expenses or sufficiency of a smaller scale production for

commercial efficiency of product), availability of “an economic infrastructure” is essential: there

should exist sustainable markets for intermediate and major investments including capital, as

well as an applicable law on property and a contractual law. If these conditions are not followed

in a way as in many countries with transition economy, then access to the market is not expected

to sufficiently limit monopoly tendencies in order ensure demonopolization.

A determinant to eliminate difficulties in access to the market in countries with transition

economy is technological achievements. Relative production expenses are key indicators in

addressing the issue of access of an enterprise to the market. All else held constant, when a new

entrant to market employs production techniques requiring less productive forces than

conventional, access to market becomes rather easy (against the case where two enterprises have

similar production expenses). By following this pattern, if existing monopolies have an outdated

and high-cost technology while new rivals in countries with transition economies are ready to

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