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Product market reforms and productivity: a review of the theoretical and empirical literature on the transmission channels

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Author Info

  • Gaëtan Nicodème

    (Solvay Business School & European Commission)

  • Jacques-Bernard Sauner-Leroy

    (Banque de France)

Abstract

Product market reforms are structural reforms of microeconomic type that aim at improving the functioning of product markets by increasing competition amongst producers of goods and services. Theoretical models suggest that regulation and reforms which liberalise or improve the functioning of markets can positively affect productivity through three different channels, namely a reallocation of scarce resources (allocative efficiency), an improvement in the utilisation of the production factors by firms (productive efficiency) and an incentive for firms to innovate to move to the modern technology frontier (dynamic efficiency). This paper reviews the theoretical and empirical literature on these three channels.

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File URL: http://128.118.178.162/eps/dev/papers/0412/0412014.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0412014.

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Length: 29 pages
Date of creation: 23 Dec 2004
Date of revision:
Handle: RePEc:wpa:wuwpdc:0412014

Note: Type of Document - pdf; pages: 29
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Web page: http://128.118.178.162

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Keywords: Productivity Product market reforms competition entry innovation;

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References

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  1. Rachel Griffith & Helen Simpson, 2001. "Characteristics of foreign-owned firms in British manufacturing," IFS Working Papers W01/10, Institute for Fiscal Studies.
  2. Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
  3. Michele Cincera, 2004. "Impact of market entry and exit on EU productivity and growth performance," ULB Institutional Repository 2013/921, ULB -- Universite Libre de Bruxelles.
  4. Nicola Brandt, 2004. "Business Dynamics, Regulation and Performance," OECD Science, Technology and Industry Working Papers 2004/3, OECD Publishing.
  5. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
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  7. Aghion, Philippe & Harris, Christopher & Vickers, John, 1997. "Competition and growth with step-by-step innovation: An example," European Economic Review, Elsevier, vol. 41(3-5), pages 771-782, April.
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  10. MacDonald, James M, 1994. "Does Import Competition Force Efficient Production?," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 721-27, November.
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  12. Philippe Aghion & Nicholas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002. "Competition and innovation: an inverted U relationship," IFS Working Papers W02/04, Institute for Fiscal Studies.
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  17. Jacques-Bernard Sauner-Leroy, 2003. "The impact of the implementation of the Single Market Programme on productive efficiency and on mark-ups in the European Union manufacturing industry," European Economy - Economic Papers 192, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  18. Karl Aiginger & Michael Landesmann, 2002. "Competitive Economic Performance: The European View," WIFO Working Papers 179, WIFO.
  19. Harrison, Ann E., 1994. "Productivity, imperfect competition and trade reform : Theory and evidence," Journal of International Economics, Elsevier, vol. 36(1-2), pages 53-73, February.
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  23. C. Denis & K. Mc Morrow & W. R�ger & R. Veugelers, 2005. "The Lisbon Strategy and the EU's structural productivity problem," European Economy - Economic Papers 221, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
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Citations

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Cited by:
  1. Theodoros S. Papaspyrou, 2007. "Economic Policy in EMU: Community Framework and National Strategies – focus on Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 04, Hellenic Observatory, LSE.
  2. Theodoros S. Papaspyrou, 2007. "Economic policy in EMU: community framework and national strategies - focus on Greece," LSE Research Online Documents on Economics 5631, London School of Economics and Political Science, LSE Library.
  3. Michele Cincera & Olivia Galgau, 2005. "Impact of Market Entry and Exit on EU Productivity and Growth Performance," Industrial Organization 0503013, EconWPA.
  4. Bianka Dettmer, 2012. "The European Union's service directive: Contrasting ex ante estimates with empirical evidence," Jena Economic Research Papers 2012-019, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  5. Edquist, Harald & Henrekson, Magnus, 2013. "Product Market Reforms and Incentives to Innovate in Sweden," Working Paper Series 986, Research Institute of Industrial Economics.
  6. Hans Pitlik & Margit Schratzenstaller, 2011. "Growth Implications of Structure and Size of Public Sectors," WIFO Working Papers 404, WIFO.
  7. Valkonen, Laura, 2006. "Deregulation as a Means to Increase Competition and Productivity," Discussion Papers 1014, The Research Institute of the Finnish Economy.

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