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Service regulations, input prices and export volumes: evidence from a panel of manufacturing firms


  • Mónica Correa-López

    () (Banco de España)

  • Rafael Doménech



Using a panel of firm-level data from Spanish manufacturers, this study shows that better service regulation reduces the price of intermediate inputs paid by downstream firms. The beneficial cost effects of services reforms extend to both large and small-to-medium sized corporations (SMEs), but the former tend to enjoy greater gains. This feature also manifests itself in international markets. We identify an input cost channel through which service regulations affect the volume of exports of large manufacturers, while the evidence of such channel is weaker for SMEs. Our estimates indicate that, from 1991 till 2007, large firms increased their volume of exports by an average of 22% as a result of the direct input cost effect of services reforms, such that the firms that benefited the most typically belonged to industries more dependent on service inputs. Furthermore, convergence to the “best practice” regulatory framework in services would have raised exports at least by an additional 10%. We conclude that firm size is relevant for the connection between services reforms, intermediate input prices and export volumes

Suggested Citation

  • Mónica Correa-López & Rafael Doménech, 2017. "Service regulations, input prices and export volumes: evidence from a panel of manufacturing firms," Working Papers 1707, Banco de España;Working Papers Homepage.
  • Handle: RePEc:bde:wpaper:1707

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    References listed on IDEAS

    1. Maican, Florin & Orth, Matilda, 2015. "A dynamic analysis of entry regulations and productivity in retail trade," International Journal of Industrial Organization, Elsevier, vol. 40(C), pages 67-80.
    2. Huergo, Elena & Jaumandreu, Jordi, 2004. "Firms' age, process innovation and productivity growth," International Journal of Industrial Organization, Elsevier, vol. 22(4), pages 541-559, April.
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    More about this item


    service regulations; intermediate input prices; exports; firm size;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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