Working Paper: NBER ID: w19488
Authors: Gilbert Cette; Jimmy Lopez; Jacques Mairesse
Abstract: Our study aims at assessing the actual importance of the two main channels usually contemplated in the literature through which upstream sector anticompetitive regulations may impact productivity growth: business investments in R&D and in ICT. We thus estimate what are the specific impacts of these two channels and their shares in total impact as against alternative channels of investments in other forms of intangible capital we cannot explicitly consider for lack of appropriate data such as improvements in skills, management and organization. For this, we specify an extended production function relating productivity explicitly to R&D and ICT capital as well as to upstream regulations, and two factor demand functions relating R&D and ICT capital to upstream regulations. These relations are estimated on the basis of an unbalanced panel of 15 OECD countries and 13 industries over the period 1987-2007. Our estimates confirm the results of previous similar studies finding that the impact of upstream regulations on total factor productivity can be sizeable, and they provide evidence that a good part of the total impact, though not a predominant one, goes through both investments in ICT and R&D, and particularly the latter.
Keywords: Productivity; R&D; ICT; Regulations; OECD
JEL Codes: C23; L16; L5; O43; O47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| regulatory burden indicator (reg) (K20) | multifactor productivity (MFP) (E23) |
| regulatory burden indicator (reg) (K20) | R&D investments (O32) |
| R&D investments (O32) | multifactor productivity (MFP) (E23) |
| regulatory burden indicator (reg) (K20) | ICT investments (L86) |
| ICT investments (L86) | multifactor productivity (MFP) (E23) |