Navigation path

Product market reforms and productivity: a review of the theoretical and empirical literature on the transmission channels - Gaëtan Nicodème and Jacques-Bernard Sauner-Leroy

Gaëtan Nicodème (Directorate General for Economic and Financial Affairs) and Jacques-Bernard Sauner-Leroy (Banque de France)

Product market reforms and productivity: a review of the theoretical and empirical literature on the transmission channels - Gaëtan Nicodème and Jacques-Bernard Sauner-Leroypdf(425 kB) Choose translations of the previous link 

Product market reforms are structural reforms of microeconomic type that aim at improving the functioning of product markets by increasing competition amongst producers of goods and services.

Theoretical models suggest that regulation and reforms which liberalise or improve the functioning of markets can positively affect productivity through three different channels, namely

  • a reallocation of scarce resources (allocative efficiency),

  • an improvement in the utilisation of the production factors by firms (productive efficiency) and

  • an incentive for firms to innovate to move to the modern technology frontier (dynamic efficiency).

This paper reviews the theoretical and empirical literature on these three channels.

(European Economy. Economic Papers. 218. December 2004. Brussels. 29pp. Tab. Free.)

KC-AI-04-218-EN-C (online)
ISBN 92-894-8365-2 (online)
ISSN 1725-3187

Additional tools

  • Print version 
  • Decrease text 
  • Increase text