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Product market regulation, innovation and productivity

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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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  • Bruno Amable & Ivan Ledezma & Stéphane Robin, 2014. "Product market regulation, innovation and productivity," Documents de travail du Centre d'Economie de la Sorbonne 14025, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:14025
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    1. repec:eee:respol:v:47:y:2018:i:9:p:1655-1673 is not listed on IDEAS
    2. Bruno AMABLE & Iván LEDEZMA, 2013. "Export Performance And Product Market Regulation," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 37, pages 231-258.
    3. Polemis, Michael & Tselekounis, Markos, 2019. "Does deregulation drive innovation intensity? Lessons learned from the OECD telecommunications sector," MPRA Paper 92770, University Library of Munich, Germany.
    4. Nauro F. Campos & Paul De Grauwe & Yuemei Ji, 2017. "Structural Reforms, Growth and Inequality: An Overview of Theory, Measurement and Evidence," CESifo Working Paper Series 6812, CESifo Group Munich.

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    Keywords

    Product market regulation; innovation; productivity; growth;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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