Product Market Regulation: Extending the Analysis Beyond OECD Countries

Economics Department Working Paper No. 799

Organization for Economic Co-Operation and Development Economics Department Working Paper No. 799

50 Pages Posted: 15 Oct 2010 Last revised: 19 Oct 2010

See all articles by Anita Wölfl

Anita Wölfl

Organization for Economic Co-Operation and Development - Economics Department

Isabelle Wanner

affiliation not provided to SSRN

Oliver Roehn

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO); CESifo (Center for Economic Studies and Ifo Institute)

Giuseppe Nicoletti

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO)

Date Written: October 6, 2010

Abstract

In this paper the recently updated product market regulation (PMR) indicators are extended to a larger set of countries including several non-OECD members. It investigates regulatory patterns in this extended set of countries as compared to the OECD countries and analyses the link between regulation and growth. On average, regulation is more restrictive of competition in non-member countries than in the OECD area. However, there exists considerable heterogeneity within this country grouping as concerns the level of the regulatory stance and its composition as well as the potential past evolution of regulatory processes. Furthermore, growth regressions provide evidence that less restrictive product market regulation is conducive to growth. An improvement of ½ index points of barriers to entrepreneurship would translate into approximately a 0.4% higher average annual rate of GDP per capita growth. However, the results also suggest that for countries that are less advanced, the potential growth benefits of enhancing product market competition may be impaired by other structural weaknesses. In particular, some restrictions of foreign trade and investment might be beneficial for growth in early stages of development.

Keywords: Product Market Regulation, Growth Regressions

JEL Classification: K20, L51, 011, 043

Suggested Citation

Wölfl, Anita and Wanner, Isabelle and Roehn, Oliver and Nicoletti, Giuseppe, Product Market Regulation: Extending the Analysis Beyond OECD Countries (October 6, 2010). Economics Department Working Paper No. 799, Organization for Economic Co-Operation and Development Economics Department Working Paper No. 799, Available at SSRN: https://ssrn.com/abstract=1692076 or http://dx.doi.org/10.2139/ssrn.1692076

Anita Wölfl (Contact Author)

Organization for Economic Co-Operation and Development - Economics Department ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Isabelle Wanner

affiliation not provided to SSRN ( email )

Oliver Roehn

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO) ( email )

2 rue Andre Pascal
Paris Cedex 16, MO 63108
France

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschingerstr. 5
Munich, DE-81679
Germany

Giuseppe Nicoletti

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO) ( email )

2 rue Andre Pascal
Paris Cedex 16, MO 63108
France
+33 1 4524 8730 (Phone)
+33 1 4524 1347 (Fax)

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