Service Deregulation, Competition, and the Performance of French and Italian Firms

25 Pages Posted: 3 Jun 2016

See all articles by Francesco Daveri

Francesco Daveri

University of Parma - Dipartimento di Economia; Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research

Rémy Lecat

Banque de France

Maria Laura Parisi

University of Brescia, Department of Economics and Management

Multiple version iconThere are 3 versions of this paper

Date Written: July 2016

Abstract

This article reports estimates of the impact of service regulation reform on the productivity of French and Italian firms in retail, transports and professional services over the period 1998–2007. We implement a two‐stage least squares estimation: the first‐stage instruments mark‐ups, a financial measure of rents, with barriers to entry and the second stage estimates the impact of instrumented mark‐ups on total factor productivity (TFP), a real measure of firm efficiency. We find that entry barriers lower firm productivity by raising mark‐ups and rents. These estimates imply that, if French and Italian regulators had adopted the OECD best practices in terms of entry barriers, firms in these sectors would have increased their TFP level by five percentage points. We do not find any robust evidence of a non‐linear relation between mark‐up and productivity.

Suggested Citation

Daveri, Francesco and Lecat, Rémy and Parisi, Maria Laura, Service Deregulation, Competition, and the Performance of French and Italian Firms (July 2016). Scottish Journal of Political Economy, Vol. 63, Issue 3, pp. 278-302, 2016. Available at SSRN: https://ssrn.com/abstract=2788304 or http://dx.doi.org/10.1111/sjpe.12092

Francesco Daveri (Contact Author)

University of Parma - Dipartimento di Economia ( email )

Via Kennedy 6
Parma, Parma 43100
Italy
+39 0521 032432 (Phone)
+39 0521 032402 (Fax)

HOME PAGE: http://www.igier.uni-bocconi.it/daveri/

Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research ( email )

Via Roentgen 1
Milan, 20136
Italy
+39 02 5836 3325 (Phone)
+39 02 5836 3302 (Fax)

Rémy Lecat

Banque de France

Paris
France

Maria Laura Parisi

University of Brescia, Department of Economics and Management ( email )

via San Faustino 74/b
Brescia, 25122
Italy
+39 0302988826 (Phone)
+39 0302988837 (Fax)

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