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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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  • Gaëtan Nicodème

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  • Jacques-Bernard Sauner-Leroy

Abstract

Product market reforms are microeconomic structural reforms that aim to improve 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 and discusses policy implications for the European Union. Copyright European Communities 2007

Suggested Citation

  • Gaëtan Nicodème & Jacques-Bernard Sauner-Leroy, 2007. "Product Market Reforms and Productivity: A Review of the Theoretical and Empirical Literature on the Transmission Channels," Journal of Industry, Competition and Trade, Springer, vol. 7(1), pages 53-72, March.
  • Handle: RePEc:kap:jincot:v:7:y:2007:i:1:p:53-72
    DOI: 10.1007/s10842-006-0417-0
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Robert Anderton & Barbara Jarmulska & Benedetta Di Lupidio, 2018. "Product market regulation, business churning and productivity: Evidence from the European Union countries," Discussion Papers 2018-12, University of Nottingham, GEP.
    2. 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.
    3. Andre Jungmittag, 2018. "The Direct and Indirect Effects of Product Market Regulations in the Retail Trade Sector," JRC Working Papers JRC112222, Joint Research Centre (Seville site).
    4. Chari, Murali D.R. & Banalieva, Elitsa R., 2015. "How do pro-market reforms impact firm profitability? The case of India under reform," Journal of World Business, Elsevier, vol. 50(2), pages 357-367.
    5. 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.
    6. 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.
    7. Harald Badinger & Niklas Maydell, 2009. "Legal and Economic Issues in Completing the EU Internal Market for Services: An Interdisciplinary Perspective," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 693-717, September.
    8. Valkonen, Laura, 2006. "Deregulation as a Means to Increase Competition and Productivity," Discussion Papers 1014, The Research Institute of the Finnish Economy.
    9. repec:kap:jproda:v:49:y:2018:i:1:d:10.1007_s11123-017-0524-4 is not listed on IDEAS
    10. Edquist, Harald & Henrekson, Magnus, 2013. "Product Market Reforms and Incentives to Innovate in Sweden," Working Paper Series 986, Research Institute of Industrial Economics.
    11. repec:rom:rmcimn:v:19:y:2018:i:4:p:410-421 is not listed on IDEAS
    12. Hans Pitlik & Margit Schratzenstaller, 2011. "Growth Implications of Structure and Size of Public Sectors," WIFO Working Papers 404, WIFO.

    More about this item

    Keywords

    product markets reforms; competition; productivity; efficiency; O12; O30; O40;

    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P - Economic Systems

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