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Competition policy and productivity growth: An empirical assessment

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  • Paolo Buccirossi
  • Lorenzo Ciari
  • Tomaso Duso
  • Giancarlo Spagnolo
  • Cristiana Vitale

Abstract

This paper empirically investigates the effectiveness of competition policy by estimating its impact on Total Factor Productivity (TFP) growth for 22 industries in 12 OECD countries over the period 1995-2005. We find a robust positive and significant effect of competition policy as measured by newly created indexes. We provide several arguments and results based on instrumental variables estimators as well as non-linearities, to support the claim that the established link can be interpreted in a causal way. At a disaggregated level, the effect on TFP growth is particularly strong for specific aspects of competition policy related to its institutional set up and antitrust activities (rather than merger control). The effect is strengthened by a good legal system, suggesting complementarities between competition policy and the efficiency of law enforcement institutions. ZUSAMMENFASSUNG - (Wettbewerbspolitik und Produktivitätswachstum: Eine empirische Bewertung) In diesem Beitrag untersuchen wir die Effektivität von Wettbewerbspolitik anhand der empirischen Schätzung ihrer Auswirkung auf das totale Faktorproduktivitätswachstum (TFP) für 22 Branchen in 12 OECD-Ländern über den Zeitraum 1995-2005. Wir finden eine robuste positive und statistisch signifikante Wirkung der Wettbewerbspolitik, welche von neu erstellten Indizes gemessen wird. Wir präsentieren unterschiedliche Argumente und Ergebnisse basierend auf Instrumental-Variablen Schätzern sowie Nichtlinearitäten, um den geschätzten Zusammenhang als kausal interpretieren zu können. Auf einer disaggregierten Ebene aufgeschlüsselt ist die Auswirkung auf das TFP-Wachstum besonders stark für spezifische Aspekte der Wettbewerbspolitik, welche eher mit deren institutionellen Aufbau und kartellrechtlichen Tätigkeiten in Zusammenhang stehen als mit der Fusionskontrolle. Wir zeigen, dass der gemessene Effekt durch gute Rechtssysteme gestärkt wird, was auf Komplementaritäten zwischen Wettbewerbspolitik und der Effizienz der Justiz hindeutet.

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Bibliographic Info

Paper provided by Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) in its series CIG Working Papers with number SP II 2009-12.

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Length: 60 pages
Date of creation: Oct 2009
Date of revision:
Handle: RePEc:wzb:wzebiv:spii2009-12

Note: Paper only available in English
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Keywords: Competition Policy; Productivity Growth; Institutions; Deterrence; OECD;

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References

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