Journal of Productivity Analysis

, Volume 45, Issue 3, pp 299–315 | Cite as

Product market regulation and innovation efficiency

Article

Abstract

We study the role of upstream product market regulation (PMR) in innovation efficiency. By estimating a knowledge production function on OECD industries through a stochastic frontier analysis, we find that service regulation reduces R&D efficiency in the manufacturing sector. These results are robust to controlling for the institutional setting of the technology, the labour and the financial market, and to various forms of heterogeneity. The marginal impact of PMR is higher in less regulated economies indicating that large improvements in R&D efficiency cannot be obtained at the earlier stages of deregulation. Potential efficiency gains for late reformers are however sizeable.

Keywords

R&D Knowledge production Efficiency Product market regulation 

JEL Classification

L5 L6 O3 O5 

Supplementary material

11123_2015_441_MOESM1_ESM.pdf (118 kb)
Supplementary material 1 (pdf 118 KB)

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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  • Chiara Franco
    • 1
  • Fabio Pieri
    • 2
  • Francesco Venturini
    • 3
    • 4
  1. 1.Department of International Economics, Institutions and DevelopmentCatholic University of the Sacred Heart of MilanMilanItaly
  2. 2.Departamento de Economia AplicadaUniversitat de ValenciaValenciaSpain
  3. 3.Department of EconomicsUniversity of PerugiaPerugiaItaly
  4. 4.NIESRLondonUK

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