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Product Market Reform and Enterprise Software Diffusion: Evidence from European Industries

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  • Shatku, Frenki

Abstract

This paper examines whether product-market reforms in upstream network sectors are associated with faster diffusion of enterprise software in downstream European industries. The analysis combines Eurostat data on Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) adoption with OECD ETCR and REGIMPACT indicators for 24 economies and 13 industries over 2010–2021. Reform exposure is constructed using major annual regulatory declines and fixed 2010 US input-output weights, while the empirical specification includes country-by-interval, industry-by-interval and country-industry fixed effects. Industries more exposed to major reforms experience faster growth in the combined ERP-CRM adoption index. At the median nonzero reform exposure, the estimate corresponds to approximately 1.5 percentage points of additional adoption growth. The response is stronger for CRM, while ERP is smaller and less precisely estimated. Minor and moderate regulatory changes show no comparable relationship. The results remain similar across alternative samples, reform thresholds and controls for the initial stage of software diffusion. The findings connect upstream product-market reform to downstream diffusion of organizational technologies.

Suggested Citation

  • Shatku, Frenki, 2026. "Product Market Reform and Enterprise Software Diffusion: Evidence from European Industries," SocArXiv r48hj_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:r48hj_v1
    DOI: 10.31235/osf.io/r48hj_v1
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    4. Océane Vernerey & Jimmy Lopez, 2026. "Regulation in the Network Sectors: Impact on the Innovation Process and the Employment Rate," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 68(1), pages 1-20, March.
    5. Nicoletti, Giuseppe & von Rueden, Christina & Andrews, Dan, 2020. "Digital technology diffusion: A matter of capabilities, incentives or both?," European Economic Review, Elsevier, vol. 128(C).
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