The Regulation of Entry and Aggregate Productivity

Markus Poschke

Economic Journal, 2010, vol. 120, issue 549, 1175-1200

Abstract: Euro area economies have lower total factor and labour productivity than the US. I argue that differences in entry cost contribute to this by affecting firms' technology choice. Introducing technology choice into a standard heterogeneous-firm model, small differences in administrative entry cost can explain around one third of TFP differences. The productivity difference arises because entry costs reduce competition and the incentive to adopt more advanced technologies. Firm heterogeneity, technology choice and the competition channel all contribute to strengthening results compared to previous studies. The effects of entry costs are even larger when the labour market is not competitive. Copyright (C) The Author(s). Journal compilation (C) Royal Economic Society 2010.

Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (43)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: The regulation of entry and aggregate productivity (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecj:econjl:v:120:y:2010:i:549:p:1175-1200

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0013-0133

Access Statistics for this article

Economic Journal is currently edited by Martin Cripps, Steve Machin, Woulter den Haan, Andrea Galeotti, Rachel Griffith and Frederic Vermeulen

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().