Productivity Growth: The Effect of Market Regulations

Christopher Kent and John Simon
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Christopher Kent: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: This paper explores the effects of product and labour market regulation on growth in total factor productivity (TFP) using panel data from 1974–2003 for 18 OECD countries. Our regressions are specified so that labour and product market regulations can affect productivity both individually and in combination. While noting that the results are sensitive to the measure of labour market regulation used, we find some support for the hypothesis that lower initial levels of regulation are associated with higher TFP growth over subsequent years, and that labour and product market deregulation have more of an effect in combination. It also appears that product market deregulation has a larger positive effect on productivity growth the further a country is from the technological frontier.

Keywords: structural reform; TFP growth; OECD; panel regression (search for similar items in EconPapers)
JEL-codes: C33 J01 L50 O43 O57 (search for similar items in EconPapers)
Date: 2007-06
New Economics Papers: this item is included in nep-cse, nep-eff, nep-lab and nep-reg
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp2007-04

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