Competition and Firm Productivity: Evidence from Firm-Level Data
IMF Working Papers, March 1, 2010
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- Competition and Firm Productivity: Evidence from Firm-Level Data
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Bibliographic details
- Authors: Marc Schiffbauer, Sandra Ospina
- Published: March 1, 2010
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451982114.001
Key findings
- The paper presents empirical evidence on the impact of competition on firm productivity using firm-level observations from the World Bank Enterprise Survey database.
- There is a positive and robust causal relationship between the proxies for competition and the measures of productivity reported in the study.
- Countries that implemented product-market reforms experienced a more pronounced increase in competition and, correspondingly, in productivity.
- The contribution to productivity growth due to competition spurred by product-market reforms is around 12-15 percent.
Data and methodology
- Data source: World Bank Enterprise Survey database (firm-level observations).
- Measures: proxies for competition and measures of firm productivity (including labor productivity and total factor productivity as indicated by subjects).
- Scope: empirical analysis presented across 34 pages.
Analysis and interpretation
- The estimated causal link indicates competition is an important determinant of firm-level productivity improvements.
- Product-market reforms are associated with measurable increases in competition and aggregate productivity, suggesting reform-driven competition channels matter for productivity growth.
- Subject areas covered include Commodity markets, Competition, Labor productivity, Productivity, Total factor productivity.
Implications for policy
- Product-market reforms can be an effective policy lever to increase competition and thus foster firm-level productivity growth.
- Policy emphasis on reducing barriers to competition is likely to contribute meaningfully to measured productivity gains (estimated contribution around 12-15 percent from reforms-related competition).
IMF Working Paper: "Competition and Firm Productivity: Evidence from Firm-Level Data" by Marc Schiffbauer and Sandra Ospina, Working Paper No. 2010/067, March 1, 2010.
Content in this bundle
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