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Product market competition and unemployment: a county-level analysis

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  • Guifeng Shi
  • Li Zhang

Abstract

By using a competition measure derived from the textual analysis of firms' 10-K filings, we examine the relationship between product market competition and the county-level unemployment. We find that unemployment is negatively related to product market competition pressure and the result is robust in additional tests. We also find that this relationship is strengthened in a good economy. Our findings are consistent with the previous theoretical prediction that competition can reduce unemployment. This article provides new evidence on the interactions between product markets and the labour market.

Suggested Citation

  • Guifeng Shi & Li Zhang, 2014. "Product market competition and unemployment: a county-level analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 21(16), pages 1134-1138, November.
    • Handle: RePEc:taf:apeclt:v:21:y:2014:i:16:p:1134-1138
    DOI: 10.1080/13504851.2014.914132
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    References listed on IDEAS

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    1. Monique Ebell & Christian Haefke, 2009. "Product Market Deregulation and the U.S. Employment Miracle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(3), pages 479-504, July.
    2. Feng Li & Russell Lundholm & Michael Minnis, 2013. "A Measure of Competition Based on 10‐K Filings," Journal of Accounting Research, Wiley Blackwell, vol. 51(2), pages 399-436, May.
    3. Tito Boeri & Giuseppe Nicoletti & Stefano Scarpetta, "undated". "Regulation and Labour Market Performance," Working Papers 158, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    4. Giuseppe Nicoletti & Stefano Scarpetta & Olivier Boylaud, 2000. "Summary Indicators of Product Market Regulation with an Extension to Employment Protection Legislation," OECD Economics Department Working Papers 226, OECD Publishing.
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