Knock-on effect of non-manufacturing regulation on manufacturing sectors efficiency and productivity
AbstractSince the mid of nineties European countries are registering an anemic growth of economic activity, in large part due to the dynamic of productivity. In 2010 the European Council adopted a new Agenda, Euro2020, which aim is to boost growth also improving European competitiveness. Regulation is one of the main factors influencing competitiveness. This paper focuses on the determinants of Total Factor Productivity (TFP) growth in 13 manufacturing sectors in a panel of 18 OECD countries from 1975 to 2007. Using the Stochastic Frontier Approach applied to the EU-KLEMS and OECD’s Regulation Impact Indicator database I found that, given the strong negative relationship between regulation and Technical Efficiency, which is one of the drivers of TFP, countries with still tight regulation in services could/should reduced it in order to improve their economic performance without detriment for public finances.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 32237.
Date of creation: 14 Jul 2011
Date of revision:
Total Factor Productivity; Technical Efficiency; Competition; Regulation; Stochastic Frontier.;
Find related papers by JEL classification:
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-27 (All new papers)
- NEP-EFF-2011-07-27 (Efficiency & Productivity)
- NEP-REG-2011-07-27 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Philippe Aghion & Richard Blundell & Rachel Griffith & Peter Howitt & Susanne Prantl, 2004.
"Entry and Productivity Growth: Evidence from Microlevel Panel Data,"
Journal of the European Economic Association,
MIT Press, vol. 2(2-3), pages 265-276, 04/05.
- Aghion, P. & Blundell, R. & Griffith, R. & Howitt, P. & Prantl, S., 2004. "Entry and productivity growth: evidence from microlevel panel data," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
- Prantl, Susanne & Howitt, Peter & Griffith, Rachel & Blundell, Richard & Aghion, Philippe, 2004. "Entry and Productivity Growth: Evidence From Microlevel Panel Data," Scholarly Articles 4481510, Harvard University Department of Economics.
- Karel Havik & Kieran Mc Morrow & Werner R�ger & Alessandro Turrini, 2008. "The EU-US total factor productivity gap : An industry perspective," European Economy - Economic Papers 339, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Olivier Blanchard, 2004.
"The Economic Future of Europe,"
Journal of Economic Perspectives,
American Economic Association, vol. 18(4), pages 3-26, Fall.
- Nicoletti, Giuseppe & Scarpetta, Stefano, 2003.
"Regulation, productivity, and growth : OECD evidence,"
Policy Research Working Paper Series
2944, The World Bank.
- Giuseppe Nicoletti & Stefano Scarpetta, 2003. "Regulation, productivity and growth: OECD evidence," Economic Policy, CEPR & CES & MSH, vol. 18(36), pages 9-72, 04.
- Giuseppe Nicoletti & Stefano Scarpetta, 2003. "Regulation, Productivity and Growth: OECD Evidence," OECD Economics Department Working Papers 347, OECD Publishing.
- Morten O. Ravn & Harald Uhlig, 2002.
"On adjusting the Hodrick-Prescott filter for the frequency of observations,"
The Review of Economics and Statistics,
MIT Press, vol. 84(2), pages 371-375.
- Ravn, M.O. & Uhlig, H., 2002. "On adjusting the Hodrick-Prescott Filter for the frequency of observations," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
- Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
- Philippe Aghion & Peter Howitt, 2006. "Joseph Schumpeter Lecture Appropriate Growth Policy: A Unifying Framework," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 269-314, 04-05.
- Wang, Hung-Jen & Ho, Chia-Wen, 2009.
"Estimating fixed-effect panel stochastic frontier models by model transformation,"
31081, University Library of Munich, Germany.
- Wang, Hung-Jen & Ho, Chia-Wen, 2010. "Estimating fixed-effect panel stochastic frontier models by model transformation," Journal of Econometrics, Elsevier, vol. 157(2), pages 286-296, August.
- Griffin, Ronald C. & Montgomery, John M. & Rister, M. Edward, 1987. "Selecting Functional Form In Production Function Analysis," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 12(02), December.
- Sharma, Subhash C. & Sylwester, Kevin & Margono, Heru, 2007. "Decomposition of total factor productivity growth in U.S. states," The Quarterly Review of Economics and Finance, Elsevier, vol. 47(2), pages 215-241, May.
- Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
- Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.