No. 132. PUBLIC OWNERSHIP, ENTRY REGULATION AND TFP GROWTH WITHIN A PRODUCTIVITY CONVERGENCE MODEL: INDUSTRY LEVEL EVIDENCE FROM SOUTH EUROPEAN COUNTRIES
S. Dimelis, S.K. Papaioannou. 2013.
In this paper, we investigate whether the degree of entry liberalization and public ownership is associated with higher industry level total factor productivity (TFP) growth of south European economies. We first estimate relative TFP levels and TFP growth rates across manufacturing and service industries of Greece, Italy and Spain, by using a standard growth accounting framework. Then, we estimate the TFP growth impact of entry liberalization and degree of public ownership, within a productivity convergence framework. To this end, we employ panel data econometric techniques. The empirical results indicate that a higher degree of entry regulation and public ownership is significantly associated with lower TFP growth only for Spanish industries. The empirical results for Italy and Greece do not provide us with any evidence for a statistically significant impact of these variables on TFP growth. We attribute the mixed nature of our results to the fact that south European economies still operate below the productivity frontier and are still considered as relatively more regulated.