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Regulations and productivity: Long run effects and nonlinear influences
Institution:1. Department of Economics, Florida International University, Miami 33199, USA;2. School of Economics, Shanghai University, Shanghai 200444, China;1. Poznan University of Economics and Business, Poland;2. Adam Mickiewicz University, Poznan, Poland;1. Department of Finance, University of Texas at Austin, Austin, TX 78712, United States;2. Department of International Trade, Dongguk University, South Korea;3. Department of Economics, Korea University Anam-dong, Seongbuk-gu, 136-705, Republic of Korea;1. Monash Business School, Monash University, Clayton, Victoria 3145, Australia;2. Cameron School of Business, University of North Carolina Wilmington, Wilmington, NC 28403, USA;3. Campbell School of Business, Berry College, Mount Berry, GA 30149, USA;4. School of Business and Institute for International Integration Studies, Trinity College, Dublin, Ireland;1. Department of Economics, City University London, London, United Kingdom;2. Department of Management and Law, Università degli Studi di Siena, Siena, Italy;3. Sda Bocconi School of Management, Milan, Italy
Abstract:This study examines the impact of product market regulations on Total Factor Productivity (TFP) and explores whether regulatory reforms exert a nonlinear influence on TFP growth. It also distinguishes between short run and long run effects of regulation. The obtained empirical evidence reveals that lower regulations in the long run exert a significantly positive effect on TFP of OECD countries. Short run effects of regulation are not always statistically significant. The influence of regulatory changes is higher in countries with high levels of regulation. Also, the damaging effects of regulation are more intense in countries with low technology gaps. These results hold across a wide array of econometric specifications and variables that measure regulation and TFP.
Keywords:Regulations  Total Factor Productivity  Long run effects  Nonlinear effects
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