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Do Product Market Regulations In Upstream Sectors Curb Productivity Growth? Panel Data Evidence For OECD Countries

  • Renaud Bourlès

    (Ecole Centrale Marseille (Aix-Marseille School of Economics), CNRS and EHESS)

  • Gilbert Cette

    (Banque de France and Aix-Marseille University (Aix-Marseille School of Economics), CNRS, and EHESS)

  • Jimmy Lopez

    (Banque de France and Université de Bourgogne)

  • Jacques Mairesse

    (CREST-ENSAE, University of Maastricht, Banque de France, and NBER)

  • Giuseppe Nicoletti

    (OECD Economics Department)

We identify the impact of intermediate goods markets imperfections on productivity downstream. Our empirical specification is based on a model of multifactor productivity (MFP) growth in which the effects of upstream competition can vary with distance to frontier. This model is estimated on a panel of fifteen OECD countries and twenty industries over 1985 to 2007. Competitive pressures are proxied with industry product market regulation data. We find evidence that anticompetitive upstream regulations have significantly curbed MFP growth over the past fifteen years, and more strongly so for observations that are close to the productivity frontier. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00338
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Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 95 (2013)
Issue (Month): 5 (December)
Pages: 1750-1768

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Handle: RePEc:tpr:restat:v:95:y:2013:i:5:p:1750-1768
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