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Product market regulation, innovation and productivity

  • Bruno Amable

    ()

    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, CEPREMAP - Centre pour la recherche économique et ses applications - Centre pour la recherche économique et ses applications, IUF - Institut Universitaire de France - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique)

  • Ivan Ledezma

    ()

    (LEDa - Université Paris-Dauphine, IRD - DIAL - UMR 225)

  • Stéphane Robin

    ()

    (PRISM - Pôle de recherche interdisciplinaire en sciences du management - Université Paris I - Panthéon-Sorbonne : EA4101)

Several recent policy and academic contributions consider that liberalising product markets would foster innovation and growth. This paper analyses the innovation-productivity relationship at the industry-level for a sample of OECD manufacturing industries. We pay particular attention to the vertically-induced influence of product market regulation (PMR) of key input sectors of the economy on the innovative process of manufacturing and its consequences on productivity. We test for a differentiated effect of this type of PMR depending on whether countries are technological leaders or laggards in a given industry and for a given time period. Contrary to the most widespread policy claims, the innovation-boosting effects of liberalisation policies at the leading edge are systematically not supported by the data. These findings question the relevance of a research and innovation policy based on liberalisation.

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Handle: RePEc:hal:cesptp:halshs-00973947
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