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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.

Economics

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This paper presents a first set of updates and extensions of the large body of existing evidence about the aggregate labour market impact of structural policies, in the context of enhancing the OECD’s supply-side framework for the quantification of reform packages. In line with previous findings, elements of the tax benefit system, activation policies and wage setting institutions are found to be robust policy determinants of the aggregate employment and unemployment rates. Looking beyond the overall employment impact, outcomes for vulnerable groups such as the low educated, the youth and the elderly tend to be more affected by certain structural policies, including specific measures targeted at them. Finally, more competition-friendly product market regulations are also found to impact aggregate employment rates positively and significantly, although less robustly.

Economics

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Recent OECD research has utilised harmonised cross-country firm level data to explore the contribution of public policies to cross-country differences in productivity, innovation and resource allocation. This paper describes the steps taken to and the trade-offs involved in constructing firm-level total factor productivity (TFP) measures using ORBIS, a cross-country longitudinal firm-level database available from Bureau van Dijk, an electronic publishing firm. First, it shows that not all productivity measures can be calculated using readily available variables for all countries, and presents possible solutions to this problem by using imputations for certain variables. Second, it assesses the accuracy of these imputations on a set of countries where the available data in ORBIS provides a good coverage, for a wide range of TFP measures. Indeed, an extensive comparison of the actual and the imputed values of TFP for those countries suggests that TFP measures using imputations provide a reasonable approximation for the "true" values. Furthermore, to improve representativeness, resampling weights are constructed - which help correcting for the underrepresentation of small firms - while for the sake of international comparability, industry-level PPP conversions are also applied. Finally, as a plausibility check and to illustrate the potential of the database, the paper explores the country-composition of the globally most productive firms, the forces of convergence to the productivity frontier and the impact of regulation on productivity growth, in a sample of 18 OECD countries.

Economics --- Industry and Services