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The short-term impact of product market reforms: A cross-country firm-level analysis

Author

Listed:
  • Peter Gal

    (OECD)

  • Alexander Hijzen

    (OECD)

Abstract
This paper analyses the effects of product market reforms in the short and medium term across 10 regulated industries and 18 advanced economies for the period 1998-2013 using internationally comparable firm-level data based on Orbis. It provides four key insights. First, product market reforms have positive effects on capital, output and employment and their effects increase over time. After two years, they raise capital by 4%, output by 3% and employment by 1.5%. Second, differences in production technology and the nature of product market regulations across sectors generate important differences in the mechanisms through which reforms operate. In network industries, reforms tend to benefit small firms, while the opposite is observed in retail trade. Product market reforms also promote firm entry, particularly those that reduce entry barriers. Third, credit constraints can play an important role in weakening the positive impact of product market reform on investment. Fourth, product market reforms also tend to have positive effects on firms in downstream sectors—both at home and abroad—that make intensive use of intermediate inputs from deregulated sectors. L'incidence à court terme des réformes des marchés de produits : Une analyse au niveau des entreprises de plusieurs pays Le présent document analyse les effets à court et moyen terme des réformes pratiquées sur les marchés de produits de dix secteurs réglementés dans dix-huit économies avancées sur la période de 1998 à 2013, à partir de données d'entreprises comparables au niveau international issues de la base Orbis. Cette analyse livre quatre grands enseignements. Premièrement, les réformes des marchés de produits ont, sur le capital, la production et l'emploi, des effets positifs qui s'accroissent avec le temps. Après deux ans, l'augmentation constatée est ainsi de 4 % pour le capital, 3 % pour la production et 1.5 % pour l'emploi. Deuxièmement, les différences dans les technologies de production et la nature de la réglementation des marchés de produits d'un secteur à l'autre engendrent d'importantes disparités dans les mécanismes par lesquels les réformes opèrent. Ainsi, dans les industries de réseau, les réformes ont tendance à profiter surtout aux petites entreprises, à l'inverse de ce que l'on observe dans le commerce de détail. Les réformes des marchés de produits favorisent aussi l'entrée d'entreprises sur le marché, en particulier lorsqu'elles ont pour effet de réduire les obstacles à l'entrée. Troisièmement, les restrictions du crédit peuvent jouer un rôle important en affaiblissant l'effet positif des réformes sur l'investissement. Enfin, quatrièmement, les réformes des marchés de produits tendent à avoir des effets positifs sur les entreprises des secteurs d'aval –tant nationaux qu'étrangers – faisant un usage intensif de ressources intermédiaires en provenance de secteurs déréglementés.

Suggested Citation

  • Peter Gal & Alexander Hijzen, 2016. "The short-term impact of product market reforms: A cross-country firm-level analysis," OECD Economics Department Working Papers 1311, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:1311-en
    DOI: 10.1787/5jlv2jm07djl-en
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    More about this item

    Keywords

    competition; compétition; credit constraints; entrée d'entreprises sur le marché; firm entry; Orbis; Orbis; restrictions du crédit; réforme structurelle; structural reforms;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L8 - Industrial Organization - - Industry Studies: Services
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities

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