Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/161846
Authors: 
Egert, Balazs
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6407
Abstract: 
Empirical research on the drivers of multi-factor productivity (MFP) is abundant at the firm- and industry level but surprisingly little research has been conducted on the determinants of MFP at the macroeconomic level. In this paper, we seek to understand the drivers of country-level MFP with a special emphasis on product and labour market policies and the quality of institutions. For a panel of OECD countries, we find that anticompetitive product market regulations are associated with lower MFP levels and that higher innovation intensity and greater openness go in tandem with higher MFP. We also find that the impact of product market regulations on MFP may depend on the level of labour market regulations. Better institutions, a more business friendly environment and lower barriers to trade and investment amplify the positive impact of R&D spending on MFP. Finally, we also show that cross-country MFP variations can be explained to a considerable extent by cross-country variation in labour market regulations, barriers to trade and investment and institutions (including corruption).
Subjects: 
multi-factor productivity
trade openness
innovation
product market regulation
labour market regulation
institutions
policy interactions
OECD
JEL: 
C23
C51
J20
L43
L51
O40
Document Type: 
Working Paper

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