Product market reforms and productivity: a review of the theoretical and empirical literature on the transmission channels

Gaëtan Nicodème and Jacques-Bernard Sauner-Leroy

No 218, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: Product market reforms are structural reforms of microeconomic type that aim at improving the functioning of product markets by increasing competition amongst producers of goods and services. Theoretical models suggest that regulation and reforms which liberalise or improve the functioning of markets can positively affect productivity through three different channels, namely a reallocation of scarce resources (allocative efficiency), an improvement in the utilisation of the production factors by firms (productive efficiency) and an incentive for firms to innovate to move to the modern technology frontier (dynamic efficiency). This paper reviews the theoretical and empirical literature on these three channels.

Keywords: product market reforms; competition; productivity; efficiency; Nicodeme; Sauner-Leroy (search for similar items in EconPapers)
Pages: 29 pages
Date: 2004-12
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Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Product Market Reforms and Productivity: A Review of the Theoretical and Empirical Literature on the Transmission Channels (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0218

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