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Competition policy and labor productivity growth: some new evidence
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Competition policy and labor productivity growth: some new evidence

Author

Listed:
  • Kelly Benetatou

    (Athens University of Economics and Business
    Hellenic Competition Commission)

  • Yannis Katsoulacos

    (Athens University of Economics and Business)

  • Ekaterini Kyriazidou

    (Athens University of Economics and Business)

  • Galateia Makri

    (Athens University of Economics and Business)

Abstract

This article contributes to the empirical literature on the impact of competition policy on labor productivity (LP) growth, focusing specifically on EU countries. We capture the quality of competition policy by the Competition Policy Indices (CPIs), proposed, constructed and used recently by Buccirossi et al. (J Compet Law Econ 7:165–204, 2011; Rev Econ Stat 95(4):1324–1336, 2013). We construct these indices also for Greece for the period 1995–2013 and use them to study the effect of competition policy on LP growth in 22 industries for a set of 10 EU countries. We find that the CPI has a positive and statistically significant effect on LP growth. Most importantly, we also investigate possible heterogeneity of this effect by separating the countries of our sample in two groups, Laggards and Leaders. We find that the effect of the CPI on LP growth for the Laggards is about three times as large as the effect estimated for all ten countries in our sample, while it is very small and statistically insignificant for the Leaders. Finally, when we estimate the effect only for Greece the coefficient increases substantially although it is estimated quite imprecisely, reinforcing our finding that gains from increasing the quality of competition policy and making product market competition more effective are to be reaped mainly by countries for which there is the greatest scope for improving the effectiveness of product market competition.

Suggested Citation

  • Kelly Benetatou & Yannis Katsoulacos & Ekaterini Kyriazidou & Galateia Makri, 2020. "Competition policy and labor productivity growth: some new evidence," Empirical Economics, Springer, vol. 58(6), pages 3035-3076, June.
    • Handle: RePEc:spr:empeco:v:58:y:2020:i:6:d:10.1007_s00181-019-01656-x
    DOI: 10.1007/s00181-019-01656-x
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    References listed on IDEAS

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    1. Benavente, José Miguel & Zuñiga, Pluvia, 2022. "How Does Market Competition Affect Firm Innovation Incentives in Emerging Countries? Evidence from Chile and Colombia," IDB Publications (Working Papers) 12198, Inter-American Development Bank.

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    More about this item

    Keywords

    Competition policy; Labor productivity; Productivity growth; Institutions;
    All these keywords.

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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