Working Paper: NBER ID: w16520
Authors: Renaud Bourles; Gilbert Cette; Jimmy Lopez; Jacques Mairesse; Giuseppe Nicoletti
Abstract: Based on an endogenous growth model, we show that intermediate goods markets imperfections can curb incentives to improve productivity downstream. We confirm such prediction by estimating a model of multifactor productivity growth in which the effects of upstream competition vary with distance to frontier on a panel of 15 OECD countries and 20 sectors over 1985-2007. Competitive pressures are proxied with sectoral product market regulation data. We find evidence that anticompetitive upstream regulations have curbed MFP growth over the past 15 years, more strongly so for observations that are close to the productivity frontier.
Keywords: Productivity; Market Regulation; OECD; Endogenous Growth
JEL Codes: C23; L16; L5; O43; O57
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| anticompetitive regulations in upstream sectors (L43) | multifactor productivity (MFP) growth in downstream sectors (O49) |
| upstream market imperfections (D43) | incentives for downstream firms to enhance productivity (L23) |
| increased proximity to technological frontier (O39) | increased negative impact of upstream regulations on downstream productivity (L51) |
| elimination of anticompetitive regulations (L43) | increase in MFP growth (O49) |