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Impact of Market Entry and Exit on EU Productivity and Growth Performance

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  • Michele Cincera

    (Université Libre de Bruxelles-DULBEA-CERT & CEPR)

  • Olivia Galgau

    (Université Libre de Bruxelles-DULBEA)

Abstract

The European Union and its Member States have been engaged in product market reforms over a long period with notable reforms including the Single Market Program and the Lisbon Agenda launched in March 2000. Product market reforms are seen as exerting both a direct and an indirect impact on productivity, however, the net effects of the direct effect were found to be small. This study concentrates on the impact of product market reforms on firm entry and exit that can itself be decomposed into two effects: internal restructuring which refers to productivity growth of individual firms present in the industry and external restructuring whereby the process of market selection leads to a reallocation of resources among individual firms. The change in firm entry and exit will in turn affect macroeconomic performance.

Suggested Citation

  • Michele Cincera & Olivia Galgau, 2005. "Impact of Market Entry and Exit on EU Productivity and Growth Performance," Industrial Organization 0503013, EconWPA.
  • Handle: RePEc:wpa:wuwpio:0503013
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    Cited by:

    1. Christian Dreger & Manuel Artís & Rosina Moreno & Raúl Ramos & Jordi Suriñach, 2007. "Study on the feasibility of a tool to measure the macroeconomic impact of structural reforms," European Economy - Economic Papers 2008 - 2015 272, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Lorenzo Codogno & Francesco Felici, "undated". "Assessing Italy's Reform Challenges:What Do Growth Accounting and Structural Indicators Say?," Working Papers 8, Department of the Treasury, Ministry of the Economy and of Finance.
    3. Brendan Burchell & Alan Hughes, 2006. "The stigma of failure: An international comparison of failure tolerance and second chancing," Working Papers wp334, Centre for Business Research, University of Cambridge.
    4. Luis Orea, 2010. "The effect of legal barriers to entry in the Spanish retail market: a local market approach," Hacienda Pública Española, IEF, vol. 193(2), pages 49-74, June.
    5. Fabienne Ilzkovitz & Adriaan Dierx & Viktoria Kovacs & Nuno Sousa, 2007. "Steps towards a deeper economic integration: the internal market in the 21st century," European Economy - Economic Papers 2008 - 2015 271, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    6. Gaëtan Nicodème & Jacques-Bernard Sauner-Leroy, 2007. "Product Market Reforms and Productivity: A Review of the Theoretical and Empirical Literature on the Transmission Channels," Journal of Industry, Competition and Trade, Springer, vol. 7(1), pages 53-72, March.
    7. Elena Podrecca, 2013. "Riforme del mercato dei prodotti e crescita della produttività. Teoria ed evidenza empirica," ECONOMIA E SOCIETÀ REGIONALE, FrancoAngeli Editore, vol. 2013(2), pages 10-41.
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    13. repec:wfo:wstudy:27459 is not listed on IDEAS
    14. Michele Cincera, 2005. "L'importance et l'étendue des barrières légales et administratives dans le cadre de la directive "Bolkenstein": une étude comparative entre la Belgique et ses principaux partenaires commerci," DULBEA Working Papers 05-11.RR, ULB -- Universite Libre de Bruxelles.
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    21. Viktoria Kocsis & Victoria Shestalova & Henry van der Wiel & Nick Zubanov & Ruslan Lukach & Bert Minne, 2009. "Relation entry, exit and productivity: an overview of recent theoretical and empirical literature," CPB Document 180, CPB Netherlands Bureau for Economic Policy Analysis.
    22. Hans Pitlik & Margit Schratzenstaller, 2011. "Growth Implications of Structure and Size of Public Sectors," WIFO Working Papers 404, WIFO.

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    Keywords

    Market entry and exit; product market reforms; macroeconomic performance;

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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