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Impact of macro‐structural reforms on the productivity growth of regions: Distance to the frontier matters

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  • Sabine D’Costa
  • Jose Enrique Garcilazo
  • Joaquim Oliveira Martins

Abstract

Using a panel of 265 regions from 24 OECD countries from 1997 to 2007, we explore the impact of nation‐wide macroeconomic and structural policies on the productivity growth of subnational regions. We find that average relationships between nation‐wide policies and regional productivity growth can hide strong differentiated effects according to the distance to the frontier: relaxing employment protection legislation on temporary contracts, lowering barriers to trade and investment and increasing trade openness enhances productivity growth in lagging regions, whereas reducing barriers to entrepreneurship or higher levels of government debt has a positive effect on regions closer to the productivity frontier. Se utiliza un panel de 265 regiones de 24 países de la OCDE entre 1997 y 2007 para examinar el impacto de las políticas macroeconómicas y estructurales a nivel nacional en el crecimiento de la productividad de las regiones subnacionales. Las relaciones habituales entre las políticas nacionales y el crecimiento de la productividad regional pueden ocultar fuertes efectos diferenciados en función de la distancia a la frontera: la relajación de la legislación de protección del empleo en materia de contratos temporales, la reducción de las barreras al comercio y a la inversión, y el aumento de la apertura comercial aumentan el crecimiento de la productividad en las regiones más rezagadas, mientras que la reducción de las barreras al espíritu emprendedor empresarial o el aumento de los niveles de endeudamiento público tienen un efecto positivo en las regiones más próximas a la frontera productiva. 本稿では、経済協力開発機構の24の加盟国における265の地域の1997年~2007年のパネルデータを用いて、地方行政区の生産性向上に対する、国全体の規模のマクロ経済の構造的な政策の影響を検討する。国全体の規模の政策と地域の生産性向上との平均的な関連性は、境界までの距離に比例した強力な差別効果を隠すことができると考えられる。すなわち、期間契約に関する雇用保護規制 (employment protection legislation)の緩和、取引と投資の規制緩和、取引の開放性の増加が不景気の地域において生産性向上を促進するが、一方でアントレプレナーシップまたは高水準の政府の負債に対する規制緩和が生産性の境界に近い地域に正の影響を与えている。

Suggested Citation

  • Sabine D’Costa & Jose Enrique Garcilazo & Joaquim Oliveira Martins, 2019. "Impact of macro‐structural reforms on the productivity growth of regions: Distance to the frontier matters," Papers in Regional Science, Wiley Blackwell, vol. 98(1), pages 133-166, February.
  • Handle: RePEc:bla:presci:v:98:y:2019:i:1:p:133-166
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    File URL: https://doi.org/10.1111/pirs.12346
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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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