The Impact of Product Market Reforms on Firm Productivity in Italy

June 15, 2016

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the role of removing obstacles to competition in product markets in raising growth and productivity. Using firm-level data from Italy during 2003–13 and OECD measures of product market regulation, we estimate the effect of deregulation in network sectors on value added and productivity of firms in these sectors, as well as firms using these intermediates in their production processes. We find evidence of a significant positive impact. These effects are more pronounced in Italian provinces with more efficient public administration, underscoring the complementarities of advancing public administration and product market reforms simultaneously.

Subject: Commodity markets, Competition, Expenditure, Financial markets, Production, Productivity, Public expenditure review, Total factor productivity

Keywords: Commodity markets, Competition, downstream firm, firm, firm data, firm performance, firm size variable, firms exit, Global, growth, performance metrics, performance variable, product markets, productivity, Public expenditure review, structural reforms, Total factor productivity, WP

Pages:
25
Volume:
2016
DOI:
https://doi.org/10.5089/9781475524925.001
Issue:
119
Series:
Working Paper No. 2016/119
Stock No:
WPIEA2016119
ISBN:
9781475524925
ISSN:
1018-5941

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