Standard theory: no competition-growth link

Mainstream competition theory is the theory of perfect competition (and also the theory of monopolistic-competition). Both of these theories result in an equilibrium position with no growth or economic change.

Mainstream growth theory explains how growth is caused by the advancement of technology. In New Growth Theory it is suggested that technology is created by investments in Research & Development (R&D). Growth theory has little (if anything) to say about competition.

Theory of dynamic competition

Standard economics teaches of “perfect competition” as an equilibrium outcome where price equals marginal cost, economic profit is zero and efficiency is maximised. This is a static theory of competition. Competition is also a process and the theory of that process is the “theory of dynamic competition”.