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Product markets’ deregulation: a more productive, more efficient and more resilient economy?

Author

Listed:
  • Gustavo Monteiro
  • Ana Fontoura Gouveia
  • Sílvia Santos

Abstract

This paper assesses the impact of product market deregulation in upstream sectors on the productivity growth of firms in downstream sectors (i.e. those firms using the output of the reformed sectors as inputs in their production process). Relying on a firm level database for the period 2004-2014 covering all Portuguese firms, we show that reforms bring productivity gains already in the short-run and that are sustained in the long-run. The effects are more positive for those further away from the technological frontier and are also heterogeneous across sectors. In addition, reforms potentiate the exit of the least productive firms, improving the resource allocation in the economy by a process of selection – for the least productive, only those that have scope to catch-up with the frontier are able to remain. Finally, we show that the adoption of product market reforms in upstream sectors leads to a more resilient economy, better equipped to face adverse shocks.

Suggested Citation

  • Gustavo Monteiro & Ana Fontoura Gouveia & Sílvia Santos, 2017. "Product markets’ deregulation: a more productive, more efficient and more resilient economy?," OECD Productivity Working Papers 9, OECD Publishing.
    • Handle: RePEc:oec:ecoaac:9-en
    DOI: 10.1787/86cc3b5e-en
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    Cited by:

    1. Iman Cheratian & Saleh Goltabar & Luis A. Gil-Alaña, 2023. "The unemployment hysteresis by territory, gender, and age groups in Iran," SN Business & Economics, Springer, vol. 3(2), pages 1-18, February.

    More about this item

    Keywords

    Exit Rates; Growth; Product Markets; Resilience; Resource Allocation; Structural Reforms; Total Factor Productivity;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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