Rent Creation and Rent Sharing: New Measures and Impacts on Total Factor Productivity

24 Pages Posted: 14 May 2020

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)

Date Written: October 2019

Abstract

This analysis proposes new measures of rent creation and rent sharing and assesses their impact on productivity on cross‐country‐industry panel data. We find first that: (1) anticompetitive product market regulations positively affect rent creation and (2) employment protection legislation boosts hourly wages, particularly for low‐skill workers. However, we find no significant impact of this employment legislation on rent sharing, as the hourly wage increases are offset by a negative impact on hours worked. Second, using regulation indicators as instruments, we find that rent creation and rent sharing both have a substantial negative impact on total factor productivity.

JEL Classification: E22, E24, O30, L50, O43, O47, C23

Suggested Citation

Cette, Gilbert and Lopez, Jimmy and Mairesse, Jacques, Rent Creation and Rent Sharing: New Measures and Impacts on Total Factor Productivity (October 2019). Economic Inquiry, Vol. 57, Issue 4, pp. 1915-1938, 2019, Available at SSRN: https://ssrn.com/abstract=3596405 or http://dx.doi.org/10.1111/ecin.12809

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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