Upstream Product Market Regulations, ICT, R&D and Productivity

53 Pages Posted: 12 Oct 2013 Last revised: 14 Mar 2015

See all articles by Gilbert Cette

Gilbert Cette

Banque de France

Jimmy Lopez

LEDi; Microeconomic and Structural Analysis Directorate

Jacques Mairesse

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); Maastricht University - United Nations and Maastricht Economic Research Institute on Innovation and Technology (UNU-MERIT); National Bureau of Economic Research (NBER)

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Date Written: October 2013

Abstract

Our study aims at assessing the actual importance of the two main channels usually contemplated in the literature through which upstream sector anticompetitive regulations may impact productivity growth: business investments in R&D and in ICT. We thus estimate what are the specific impacts of these two channels and their shares in total impact as against alternative channels of investments in other forms of intangible capital we cannot explicitly consider for lack of appropriate data such as improvements in skills, management and organization. For this, we specify an extended production function relating productivity explicitly to R&D and ICT capital as well as to upstream regulations, and two factor demand functions relating R&D and ICT capital to upstream regulations. These relations are estimated on the basis of an unbalanced panel of 15 OECD countries and 13 industries over the period 1987-2007. Our estimates confirm the results of previous similar studies finding that the impact of upstream regulations on total factor productivity can be sizeable, and they provide evidence that a good part of the total impact, though not a predominant one, goes through both investments in ICT and R&D, and particularly the latter.

Suggested Citation

Cette, Gilbert and Lopez, Jimmy and Mairesse, Jacques, Upstream Product Market Regulations, ICT, R&D and Productivity (October 2013). NBER Working Paper No. w19488. Available at SSRN: https://ssrn.com/abstract=2339410

Gilbert Cette (Contact Author)

Banque de France ( email )

Paris
France

Jimmy Lopez

LEDi ( email )

Boulevard Gabriel
Dijon, Bougogne 21000
France

Microeconomic and Structural Analysis Directorate ( email )

Paris
France

Jacques Mairesse

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

Maastricht University - United Nations and Maastricht Economic Research Institute on Innovation and Technology (UNU-MERIT)

Keizer Karelplein 19
6211 TC Maastricht
Netherlands

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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