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The Economic Impact of Professional Services Liberalisation

Author

Listed:
  • Erik Canton
  • Daria Ciriaci
  • Irune Solera

Abstract

Competition in professional services is, in some occasions, hindered by excessive regulation. This may constrain business dynamics (entry and exit of firms) and create inefficiencies and excessive rents. To improve market performance in those professional services generally regulated, several EU countries have reduced regulatory restrictions regarding the entry into and exercise of these professions. This study is an attempt to evaluate the effects of regulatory barriers in four of them, i.e. legal, accounting, architectural and engineering activities in the EU over the period 2008-2011. It is found that less strict regulation improves their allocative efficiency and reduces the observed larger-than-average profitability, through intensified business dynamics.

Suggested Citation

  • Erik Canton & Daria Ciriaci & Irune Solera, 2014. "The Economic Impact of Professional Services Liberalisation," European Economy - Economic Papers 2008 - 2015 533, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0533
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    Citations

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    Cited by:

    1. Ciriaci, Daria & Grassano, Nicola & Vezzani, Antonio, 2019. "Regulations and location choices of top R&D investors worldwide," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 29-42.
    2. Matteo Fiorini & Bernard Hoekman, 2017. "Economic Governance, Regulation and Services Trade Liberalization," RSCAS Working Papers 2017/27, European University Institute.
    3. Oliver Arentz & Clemens Recker & Leonhard Münstermann & Steffen J. Roth, 2015. "Der Dienstleistungssektor in Deutschland: Überblick und Deregulierungspotenziale," Otto-Wolff-Institut Discussion Paper Series 01/2015, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.
    4. Lankau, Matthias & Müller, Klaus, 2017. "Vor- und Nachteile des Meisterbriefs im Vergleich zu freiwilligen Qualifikationszertifikaten - Eine Analyse für das deutsche Handwerk," Göttinger Beiträge zur Handwerksforschung 15, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).
    5. Dimitris Malliaropulos & Dimitris Papageorgiou & Melina Vasardani & Evangelia Vourvachaki, 2021. "The impact of the Recovery and Resilience Facility on the Greek economy," Economic Bulletin, Bank of Greece, issue 53, pages 7-28, July.
    6. Krebs, Tom & Scheffel, Martin, 2016. "Quantifizierung der gesamtwirtschaftlichen Effekte ausgewählter Reformvorschläge der Studie "Reforms, Investment and Growth: An Agenda for France, Germany and Europe"," Working Papers 16-04, University of Mannheim, Department of Economics.
    7. Anderton, Robert & Di Lupidio, Benedetta & Jarmulska, Barbara, 2020. "The impact of product market regulation on productivity through firm churning: Evidence from European countries," Economic Modelling, Elsevier, vol. 91(C), pages 487-501.
    8. Eric Jondeau & Grégory Levieuge & Jean-Guillaume Sahuc & Gauthier Vermandel, 2023. "Environmental Subsidies to Mitigate Net-Zero Transition Costs," Working papers 910, Banque de France.
    9. Masuch, Klaus & Anderton, Robert & Setzer, Ralph & Benalal, Nicholai, 2018. "Structural policies in the euro area," Occasional Paper Series 210, European Central Bank.
    10. Chantal Kegels & Dirk Verwerft, 2018. "Working Paper 09-18 - Economic impact of professional services reform in Belgium - A DSGE simulation," Working Papers 1809, Federal Planning Bureau, Belgium.
    11. Ersi Athanassiou & Nikolaos C. Kanellopoulos & Roxani Karagiannis & Ioannis Katselidis & Agapi Kotsi, 2016. "Measurement of the intensity of the reforms in professions and economic activities in Greece via a composite regulation index," International Economics and Economic Policy, Springer, vol. 13(3), pages 411-428, July.
    12. Müller, Klaus, 2016. "Economic Effects of Deregulation - Using the Example of the Revised Trade and Crafts Code 2004," ifh Working Papers 5 (2016), Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).
    13. Dellis, Konstantinos & Sondermann, David, 2017. "Lobbying in Europe: new firm-level evidence," Working Paper Series 2071, European Central Bank.
    14. Beck, Krzysztof, 2021. "Why business cycles diverge? Structural evidence from the European Union," Journal of Economic Dynamics and Control, Elsevier, vol. 133(C).

    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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