RENT CREATION AND RENT SHARING: NEW MEASURES AND IMPACTS ON TOTAL FACTOR PRODUCTIVITY

Gilbert Cette, Jimmy Lopez () and Jacques Mairesse

Economic Inquiry, 2019, vol. 57, issue 4, 1915-1938

Abstract: This analysis proposes new measures of rent creation and rent sharing and assesses their impact on productivity on cross‐country‐industry panel data. We find first that: (1) anticompetitive product market regulations positively affect rent creation and (2) employment protection legislation boosts hourly wages, particularly for low‐skill workers. However, we find no significant impact of this employment legislation on rent sharing, as the hourly wage increases are offset by a negative impact on hours worked. Second, using regulation indicators as instruments, we find that rent creation and rent sharing both have a substantial negative impact on total factor productivity. (JEL E22, E24, O30, L50, O43, O47, C23)

Date: 2019
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https://doi.org/10.1111/ecin.12809

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Working Paper: Rent Creation and Rent Sharing: New Measures and Impacts on Total Factor Productivity (2019)
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