Competition Policy and Productivity Growth: An Empirical Assessment

WZB Working Paper No. SP II 2009 12

60 Pages Posted: 21 Nov 2009 Last revised: 1 Dec 2009

See all articles by Paolo Buccirossi

Paolo Buccirossi

Laboratorio di economia, antitrust, regolamentazione (LEAR)

Lorenzo Ciari

European University Institute

Tomaso Duso

German Institute for Economic Research (DIW Berlin); TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization

Giancarlo Spagnolo

Stockholm School of Economics (SITE); Centre for Economic Policy Research (CEPR); University of Rome 'Tor Vergata'; EIEF

Cristiana Vitale

Lear - Laboratory of Economics, Antitrust, Regulation

Multiple version iconThere are 2 versions of this paper

Date Written: October 12, 2009

Abstract

This paper empirically investigates the effectiveness of competition policy by estimating its impact on Total Factor Productivity (TFP) growth for 22 industries in 12 OECD countries over the period 1995-2005. We find a robust positive and significant effect of competition policy as measured by newly created indexes. We provide several arguments and results based on instrumental variables estimators as well as non-linearities, to support the claim that the established link can be interpreted in a causal way. At a disaggregated level, the effect on TFP growth is particularly strong for specific aspects of competition policy related to its institutional set up and antitrust activities (rather than merger control). The effect is strengthened by a good legal system, suggesting complementarities between competition policy and the efficiency of law enforcement institutions.

Keywords: Competition Policy, Productivity Growth, Institutions, Deterrence, OECD

JEL Classification: L4, K21, O4, C23

Suggested Citation

Buccirossi, Paolo and Ciari, Lorenzo and Duso, Tomaso and Spagnolo, Giancarlo and Vitale, Cristiana, Competition Policy and Productivity Growth: An Empirical Assessment (October 12, 2009). WZB Working Paper No. SP II 2009 12. Available at SSRN: https://ssrn.com/abstract=1487489 or http://dx.doi.org/10.2139/ssrn.1487489

Paolo Buccirossi (Contact Author)

Laboratorio di economia, antitrust, regolamentazione (LEAR) ( email )

Via di Monserrato 48
Rome, 00186
Italy
+39 066 830 0530 (Phone)

Lorenzo Ciari

European University Institute ( email )

Villa Schifanoia
133 via Bocaccio
Firenze (Florence), Tuscany 50014
Italy

Tomaso Duso

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization ( email )

Berlin, 10585
Germany

Giancarlo Spagnolo

Stockholm School of Economics (SITE) ( email )

P.O. Box 6501
Stockholm
Sweden

HOME PAGE: http://https://sites.google.com/site/giancarlospagnoloshomepage/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

University of Rome 'Tor Vergata' ( email )

Faculty of Economics - DEI
Via Columbia 2
Rome, RM 00133
Italy

EIEF ( email )

Via Due Macelli, 73
Rome, 00187
Italy

HOME PAGE: http://WWW.EIEF.IT

Cristiana Vitale

Lear - Laboratory of Economics, Antitrust, Regulation ( email )

Via di Monserrato, 48
Rome, 00186
Italy

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