Competition Policy and Productivity Growth: An Empirical Assessment

Paolo Buccirossi, Lorenzo Ciari, Tomaso Duso (), Giancarlo Spagnolo and Christiana Vitale ()
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Paolo Buccirossi: LEAR
Lorenzo Ciari: LEAR and EUI
Christiana Vitale: LEAR

No 283, Discussion Papers from SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: This paper empirically investigates the effectiveness of competition policy by estimating its impact on Total Factor Productivity (TFP) growth for 22 industries in 12 OECD countries over the period 1995-2005. We find a robust positive and significant effect of competition policy asmeasured by newly created indexes. We provide several arguments and results based on instrumental variables estimators as well as non-linearities to support the claim that the established link can be interpreted in a causal way. At a disaggregated level, the effect on TFP growth is particularly strong for specific aspects of competition policy related to its institutional setup and antitrust activities (rather than merger control). The effect is strengthened by good legal systems, suggesting complementarities between competition policy and the efficiency of law enforcement institutions.

Keywords: Competition Policy; Productivity Growth; Institutions; Deterrence; OECD (search for similar items in EconPapers)
JEL-codes: L4 K21 O4 C23 (search for similar items in EconPapers)
Date: 2009-09
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Related works:
Working Paper: Competition Policy and Productivity Growth: An Empirical Assessment (2009)
Working Paper: Competition policy and productivity growth: An empirical assessment (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:trf:wpaper:283

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