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Competition Policy and Productivity Growth: An Empirical Assessment

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

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 good legal systems, suggesting complementarities between competition policy and the efficiency of law enforcement institutions.

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  • Buccirossi, Paolo & Ciari, Lorenzo & Duso, Tomaso & Spagnolo, Giancarlo & Vitale, Cristiana, 2009. "Competition Policy and Productivity Growth: An Empirical Assessment," CEPR Discussion Papers 7470, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:7470
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    More about this item

    Keywords

    Antitrust; Competition Policy; Deterrence; Institutions; Productivity Growth;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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