Productivity Growth: The Effect of Market Regulations
AbstractThis paper explores the effects of product and labour market regulation on growth in total factor productivity (TFP) using panel data from 1974–2003 for 18 OECD countries. Our regressions are specified so that labour and product market regulations can affect productivity both individually and in combination. While noting that the results are sensitive to the measure of labour market regulation used, we find some support for the hypothesis that lower initial levels of regulation are associated with higher TFP growth over subsequent years, and that labour and product market deregulation have more of an effect in combination. It also appears that product market deregulation has a larger positive effect on productivity growth the further a country is from the technological frontier.
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Bibliographic InfoPaper provided by Reserve Bank of Australia in its series RBA Research Discussion Papers with number rdp2007-04.
Date of creation: Jun 2007
Date of revision:
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
- O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-18 (All new papers)
- NEP-CSE-2007-06-18 (Economics of Strategic Management)
- NEP-EFF-2007-06-18 (Efficiency & Productivity)
- NEP-LAB-2007-06-18 (Labour Economics)
- NEP-REG-2007-06-18 (Regulation)
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