Selected results from the PMR project 2007-2010, with ... · Selected results from the PMR project...
Transcript of Selected results from the PMR project 2007-2010, with ... · Selected results from the PMR project...
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The OECD Indicators of Product Market
Regulation
Selected results from the PMR project 2007-2010, with contributions from Tomasz Kozluk, Giuseppe Nicoletti, Oliver Röhn,
Isabelle Wanner and Anita Wölfl (presenting)
Ifo/cesifo-OECD conference on regulation,Munich, 29-30 January 2010
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A reminder: PMR - What is it all about?
Basic idea– Turn qualitative data on laws and regulations that inhibit competition into
quantitative indicators.
Bottom-up approach based on regulatory data– Data derived from a survey of member countries (and external data sets)– Policy focused – i.e., not based on opinion surveys or market outcomes– Vetted by government officials with peer-review
A policy tool– Benchmarking to allow comparison across countries– Diagnostic tool for specific policy advice– Empirical analysis of the competition-performance link
– Indicators available on line for government agencies and academics at www.oecd.org/eco/pmr
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PMREconomy-wide regulation
40 countries1998, 2003 and 2007/8Updated every 5 years
NMRNon-manufacturing regulation
Border barriersTariff/non-tariff & FDI restrictions
ETCRRegulation in energy,
transport &communications7 sectors
30 countries1975-07
Continuous update
RBSRRegulation in retail &
business services5 sectors
30 countries1998, 2003 and 2007
Updated every 5 years
FDIRestrictions in manuf
and non-manuf10 sectors
30 countries1980-2007
Updated continuously
TariffsManufacturing
industries30 countries1988-2007
2-digit ISIC Rev. 3Updated continuously
RIRegulation impact/burden
All sectors (manuf and non-manuf)30 countries
1975-07Continuous update
State control Barriers to entrepreneurship Barriers to trade and investment
Sectoral indicator system
Economy-wide indicator system
The PMR indicator system
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The “integrated” PMR indicator
Scope of public enterprise
(0.33)
Direct control over business
enterprises(0.33)
Scope of public enterprise
(0.33)
Direct control over business
enterprises(0.33)
Licenses and permits system
(0.50)
Communication and
simplification of rules and procedures
(0.50)
Licenses and permits system
(0.50)
Communication and
simplification of rules and procedures
(0.50)
Sector-specific administrative
burdens(0.33)
Sector-specific administrative
burdens(0.33)
Legal barriers(0.25)
Antitrust exemptions
(0.25)
Legal barriers(0.25)
Antitrust exemptions
(0.25)
Discriminatory procedures
(0.33)
Discriminatory procedures
(0.33)
Regulatory barriers
(1.0)
Regulatory barriers
(1.0)
Gov’t involvement in network sectors
(0.33)
Gov’t involvement in network sectors
(0.33)
Barriers in network sectors
(0.25)
Barriers in services(0.25)
Barriers in network sectors
(0.25)
Barriers in services(0.25)
Barriers to FDI(0.33)
Barriers to FDI(0.33)
Product market regulationProduct market regulation
Tariffs(0.33)Tariffs(0.33)
Admin. burdens for corporations
(0.33)
Admin. burdens for sole
proprietor firms(0.33)
Admin. burdens for corporations
(0.33)
Admin. burdens for sole
proprietor firms(0.33)
Price controls(0.50)
Use of command
and control regulation
(0.50)
Price controls(0.50)
Use of command
and control regulation
(0.50)
State control(0.33)
State control(0.33)
Other barriers(0.50)
Other barriers(0.50)
Explicit barriers to trade and investment
(0.50)
Explicit barriers to trade and investment
(0.50)
Barriers to competition
(0.33)
Barriers to competition
(0.33)
Regulatory and administrative
opacity(0.33)
Regulatory and administrative
opacity(0.33)
Involvement in business
operations(0.50)
Involvement in business
operations(0.50)
Public ownership
(0.50)
Public ownership
(0.50)
Barriers to trade and investment (0.33)
Barriers to trade and investment (0.33)
Barriers to entrepreneurship(0.33)
Barriers to entrepreneurship(0.33)
Administrative burdens on start-ups
(0.33)
Administrative burdens on start-ups
(0.33)
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OECD indicators of regulation impact/burden (RI)
Measure the direct and indirect effects of regulation on each sector of the economy
Can distinguish border vs. domestic regulations and direct competition effects vs. cost of input effects
Computed as weighted sum of (sectoral) regulation, with weights reflecting the inter-industry linkages:
Where c=country, s=sector, k=intermediate input, t=period, PMR = regulation (domestic or border regulation, aggregate or individual subsets, …) w = weights from I-O-tables, e.g.:
– direct competition effects: 1, (equ. Individual regulatory indicators)– indirect first stage effects: technical coefficients– indirect all stage effects: coefficients of the inverted Leontief matrix
Computed for 38 ISIC sectors in 29 countries over 1975-2007
∑ ∗=k
cktckscst PMRwRI
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A note on the potential burden on other industries Percentage share of demand components in total output
of services and manufacturing
Source: Pilat and Wölfl (2005), based on I-O-Tables, France, 2002
53.9% 29.7%
28.1% 28.4%
5.1% 26.6%
10.1%
9.8%
ICServices
IC Manu-
facturing
DomesticFinal
Demand
Exports Exports
DomesticFinal
Demand
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A note on the potential burden on other industriescomputed input flow matrix (in terms of employment used)
FranceDirect Total
Manu-facturing Services Other Ind Total
indirect
Use of employment of ..
Manufacturing 1263 858 375 2496 1716 4213in % 25.1 5.6 13.0 29.3 11.5 18.0Services 1502 2722 641 4865 11570 16435in % 29.8 17.6 22.2 57.1 77.9 70.3Other Industries 551 305 302 1158 1575 2733in % 10.9 2.0 10.4 13.6 10.6 11.7Total Indirect 3315 3885 1318 8519in % 65.9 25.1 45.6 100.0
1716 11570 1575 14862in % 34.1 74.9 54.4 100.0
5032 15456 2893 23381in % 100 100 100 100
Dire
ctTo
tal
.. to produce final demand in ..Indirect
Indi
rect
Source: OECD I-O-Database 2004, Pilat & Wölfl (2005)
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PMR in OECD and non-member countries, 2008Index scale of 0-6 from least to most restrictive
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0U
nite
d K
ingd
omU
nite
d St
ates
Irel
and
Icel
and
Can
ada
Net
herla
nds
Den
mar
kSp
ain
Nor
wa y
Japa
nN
ew Z
eala
ndSw
itzer
land
Finl
and
Ger
man
yH
unga
ryA
ustra
liaB
elgi
umSw
eden
Kor
eaFr
ance
Ital
yPo
rtuga
lA
ustri
aLu
xem
bour
gSl
ovak
Rep
ublic
Cze
ch R
e pub
licM
exic
oTu
rke y
Pola
ndG
reec
e
Esto
nia
Slov
enia
Chi
leIs
rael
Rus
sia
Bra
zil
Chi
na
Integrated PMR
OECD average
Non-member countries average
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This is the result of substantial reform progress Index scale of 0-6 from least to most restrictive, OECD
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Sca
le 0
-6 fr
om le
ast t
o m
ost r
estri
ctiv
e
1998 2003 2008
Aggregate PMR in OECD countries, 1998-2008
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Significant differences in reforms across countriesTests based on Country-Product Dummy Approach (CPD)
1998 to 2003 2003 to 2008 1998 to 2008Australia (-) (+) (-)Austria (-)* (-) (-)***Belgium (-) (-) (-)*Canada (-) (-) (-)Czech Republic (-)** (-) (-)***Denmark (-) (-) (-)*Finland (-)*** (-) (-)***France (-)*** (-) (-)***Germany (-)* (-) (-)***Hungary (-) (-)** (-)***Iceland (-) (-) (-)**Italy (-)** (-) (-)***Japan (-)* (-) (-)***Korea (-) (-) (-)*Luxembourg . (+) .Mexico (-) (-) (-)Netherlands (-) (-)* (-)***New Zealand (-) (+) (-)Norway (-)* (-) (-)***Poland (-) (-) (-)**Portugal (-)** (-) (-)***Spain (-)* (-)* (-)***Sweden (-) (-) (-)**Switzerland (-)* (-) (-)***Turkey (-)* (-) (-)**United Kingdom (-) (+) (-)United States (-) (-) (-)
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… and slowing pace of convergenceLevel and change in index points, with 0=least and 6=most restrictive
Panel A. 1998-2003 Panel B. 2003-2008
AUS
AUTBEL
CAN
CZE
DNK
FIN FRA
GER
HUN
ICE
ITAJAP
KOR
MEX
NLDNZL
NOR
PRT
ESP
SWE
CHE TUR
GBRUSA
-1.20
-1.00
-0.80
-0.60
-0.40
-0.20
0.00
0.20
0.40
0.600.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50
2003-1998 …
1998 values
Correlation coefficient: -0.84
AUS
AUT
BELCAN
CZE
DNKFIN
FRAGER
HUN
ICE
ITA
JAP KOR
MEX
NLD
NZL
NOR
POL
PRT
ESP
SWE
CHE
TUR
GBR
USA
-1.20
-1.00
-0.80
-0.60
-0.40
-0.20
0.00
0.20
0.40
0.600.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50
2008-2003 …
2003 values
Correlation coefficient: -0.62
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Strong reform in certain regulatory areas …Average change in index points, 0=least and 6=most restrictive
-1.4
-1.2
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2Average change 98-03 Average change 03-08
Barriers to entrepreneurshipBarriers to trade and investment
State control
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… with signs of reform complementaritiesIndex scale of 0-6 from least to most restrictive
Aus
AutBel
Can
Cze
Dnk
Fin
Fra
GerHun
Isl
Ita
Jpn
Kor
MexNld
Nzl
Nor
Pol
Prt
Esp
Swe
Che
Tur
Gbr
Usa
-0.1
-0.1
-0.1
-0.1
0.0
0.0
0.06 8 10 12 14 16
Cha
nge
in P
MR
'98-
'08,
rela
tive
to n
umbe
r of
refo
rms
Number of regulatory areas with reforms
Correlation coefficient: -0.59***
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Scope for reforms remainsDistance from best practice, OECD,
Index scale of 0-6 from least to most restrictive
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Mean across countries
Variance across
countries
State control Barrier to entrepreneurship Barrier to trade and investment
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Regulation matters for GDP per capita
aus
aut
belbra
bgr
can
chl
chn
hrv
cze
dnkest
fin
fra
deu
grc
hun
isl
ind
idn
ire
isr
itajpn
kormex
nld
nzl
nor
pol
prt
rou
rus
slo
zafesp
swe
che
turukr
gbr
usa
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
0 10000 20000 30000 40000 50000 60000
PMR 1998
GDP per capita, PPP (current international $), 2007
Correlation coefficient = -0.51
t-statistic = -3.78
1. Based on a "simplified" PMR indicator. PMR measured in 1998 for OECD countries; 2008 for candidate countries for accession countries, Brazil and China; 2007 for Croatia, Indonesia, South Africa and Ukraine; 2006 for Bulgaria, India and Romania.
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With barriers to competition driving the result IDep.Var: ln growth in GDP per capita, Cross section analysis, BMA
Notes: Constant always included but not reported. All standard deviations are robust. + Post Inclusion Prob. >=50 and <75; * Post Inclusion Prob. >=75 and <95; ** Post Inclusion Prob. >=95 and <99; ** Post Inclusion Prob. >=99
Post-Inclusion probability
Post-Inclusion probability
Post-Inclusion probability
Ln(GDP p.c.), initial -0.002 27.1 -0.003 37.1 -0.008 * 78.1Ln(population growth) 0.000 12.4 0.001 13.8 -0.003 19.3Ln(investment/GDP ratio) 0.012 + 52.4 0.013 + 56.1 0.031 ** 97.2Secondary enrollment ratio 0.000 14.5 0.000 15.7 0.000 + 60.7Inflation 0.000 14.2 0.000 15.1 0.000 5.6Government consumption 0.000 14.2 0.000 15.2 0.000 6.6Domestic credit to private sector 0.000 + 61.8 0.000 + 60.9 0.000 8.7Rule of Law 0.000 19.9 0.001 22.7 0.000 12.6Life expectancy at birth -0.002 * 88.5Ethnic fragmentation -0.007 + 52.7% of land area in tropics -0.027 *** 99.0
Public ownership 0.000 9.9Involvement in business operations 0.000 5.1Administrative burdens on start-ups 0.000 7.6Regulatory and administrative opacity 0.000 18.6Barriers to competition -0.003 + 57.3 -0.005 * 79.4 -0.010 *** 100.0Explicit barriers to trade and investment 0.000 6.5Other barriers to trade 0.000 5.8
Coefficient Coefficient Coefficient
Integrated PMR Simplified PMR Simplified PMROECD OECD Full sample
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With barriers to competition driving the result II Dep.Var: ln growth in GDP per capita , Panel analysis, BMA
Notes: Constant always included but not reported. All standard deviations are robust. + Post Inclusion Prob. >=50 and <75; * Post Inclusion Prob. >=75 and <95; ** Post Inclusion Prob. >=95 and <99; ** Post Inclusion Prob. >=99
Post-Inclusion probability
Post-Inclusion probability
Post-Inclusion probability
Ln(GDP p.c.), initial -0.001 16.8 -0.002 23.2 -0.001 11.9Ln(population growth) 0.001 13.6 0.001 13.5 -0.007 25.7Ln(investment/GDP ratio) 0.005 28.7 0.006 32.5 0.039 *** 99.9Secondary enrollment ratio 0.000 16.3 0.000 12.7 0.000 26.8Inflation 0.000 + 72.5 0.000 + 66.4 -0.001 * 88.6Government consumption 0.000 13.5 0.000 23.0 0.000 10.1Domestic credit to private sector 0.000 * 92.6 0.000 * 87.0 0.000 40.4Rule of Law 0.000 13.3 0.000 13.8 -0.006 + 65.5Life expectancy at birth -0.002 ** 96.5Ethnic fragmentation -0.004 25.2% of land area in tropics -0.022 * 84.8
Public ownership 0.000 14.3Involvement in business operations 0.000 3.6Administrative burdens on start-ups 0.000 6.5Regulatory and administrative opacity 0.000 8.4Barriers to competition -0.005 + 70.0 -0.008 * 94.4 -0.009 *** 99.6Explicit barriers to trade and investment 0.000 3.6Other barriers to trade 0.000 5.5
Coefficient Coefficient Coefficient
Integrated PMR Simplified PMR Simplified PMROECD OECD Full sample
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To be continued – work in progress
Refinement of new generation PMR– To cover evolving regulatory issues:
• Regulatory quality – sector regulators• Governance of state-owned enterprises• More elaborate treatment of non-tariff barriers to trade
Further extension to other countries– Integrated PMR for all accession candidate and enhanced engagement
countries.
Refined analysis of the regulation-performance link– e.g. interaction term model, individual regulatory areas, – “true” panel analysis for non-members,– more analysis of the inter-industry linkages and the role of regulation– impact of PMR on other outcome variables.
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Thank you !
For further information:www.oecd.org/eco/pmr
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The current tree structure of NMR [1]
ETCRETCR
Gas RoadAirlines
Public ownership
Entry EntryEntry EntryEntry Entry
TelecomsElectricity PostRail
Public ownership
Market structure
Public ownership
Vertical integration
Public ownership
Market structure
Entry
Public ownership
Public ownership
Market structure
Vertical integration
Prices
Vertical integration
Energy Transport Communication
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Conduct regulation
Prices and fees
Registration Shop opening
hours
Conduct regulation
Entry regulation
Entry regulation
Advertising
Form of business
Licenses and permits
Large outlet restrictions
Price controls
Licensing
Education requirements
Retail distribution Professional services
Protection of incumbents
Quotas and economic needs tests
Inter-professional cooperation
The current tree structure of NMR [2]
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Reconsidering the weights (JRC)PMR 2008, computed with PCA based on data for different years
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Reconsidering the weights (JRC)PMR 2003, PCA based on different number of low-level indicators
AUS
AUT
BELCAN
CZE
DNK
FIN
FRA
DEU
HUN
ISL
ITA
JPN
KOR
LUX
MEX
NLD
NZL
NOR
POL
PRTESP
SWE
CHE
TUR
UKMUSA
0
3
6
9
12
15
18
21
24
27
30
0 3 6 9 12 15 18 21 24 27 30
PCA
18 in
dica
tors
PCA 15 indicators
PCA weights computed from 15 or 18 indicators
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Testing progress in reform bilateral comparisons, CPD
USA GBR CAN NZL AUS DEN NLD ICE NOR SWE GER FIN BEL JAP AUT PRT HUN KOR MEX CHE FRA ESP ITA CZE TUR POLUSA . (+)* (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)***GBR . (+)** (+)* (+)*** (+)*** (+)** (+)** (+)*** (+)*** (+)*** (+)** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)***CAN . (+)* (+)* (+)** (+)*** (+)** (+)** (+)*** (+)*** (+)*** (+)** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)***NZL . (+)* (+)* (+)*** (+)*** (+)** (+)** (+)*** (+)*** (+)*** (+)** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)*** (+)***AUS (-)* . (+)** (+)** (+)* (+)** (+)*** (+)** (+)* (+)*** (+)** (+)*** (+)*** (+)*** (+)*** (+)*** (+)***DEN . (+)* (+)* (+)* (+)*** (+)* (+)*** (+)** (+)*** (+)*** (+)*** (+)***NLD (-)*** . (+)* (+)* (+)** (+)* (+)*** (+)* (+)*** (+)*** (+)*** (+)*** (+)*** (+)***ICE (-)*** . (+)* (+)* (+)* (+)*** (+)* (+)*** (+)** (+)*** (+)*** (+)*** (+)***NOR (-)*** (-)** (-)* (-)* . (+)** (+)** (+)* (+)** (+)** (+)*** (+)***SWE (-)*** (-)* (-)* (-)* . (+)** (+)*** (+)***GER (-)*** (-)*** (-)** (-)*** (-)** . (+)* (+)*** (+)***FIN (-)*** (-)*** (-)*** (-)*** (-)** (-)* . (+)* (+)*** (+)***BEL (-)*** (-)** (-)** (-)** . (+)** (+)***JAP (-)*** (-)** (-)** (-)** (-)* . (+)** (+)***AUT (-)*** (-)*** (-)*** (-)*** (-)** (-)* (-)* (-)* . (+)*** (+)***PRT (-)*** (-)*** (-)*** (-)*** (-)*** (-)* (-)** (-)* . (+)*** (+)***HUN (-)*** (-)*** (-)*** (-)*** (-)** (-)* (-)* (-)* . (+)** (+)**KOR (-)*** (-)** (-)** (-)** (-)* . (+)* (+)**MEX (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)** . (+)** (+)**CHE (-)*** (-)*** (-)*** (-)*** (-)** (-)* (-)* (-)* . (+)**FRA (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)** . (+)** (+)**ESP (-)*** (-)*** (-)*** (-)*** (-)*** (-)** (-)*** (-)** (-)* . (+)**ITA (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)** . (+)**CZE (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)** (-)** (-)* (-)* .TUR (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)** (-)** (-)*** (-)*** (-)** (-)* (-)** (-)** .POL (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)*** (-)** (-)** (-)** (-)** (-)** (-)** (-)** .
White: PMR not significant different between country pair, un-shaded: sign. different in 1998, shaded: sign. different still in 2008
25
Reforms particularly in network sectors…Index scale of 0-6 from least to most restrictive
26
… passing through to lower knock-on effectsNormalised index scale of 0-1 from least to most restrictive
27
Some signs of reform complementaritiesBilateral correlations
Scop
e of
pub
lic e
nter
pris
e se
ctor
Dire
ct c
ontro
l ove
r bu
sine
ss e
nter
pris
e
Gov
ernm
ent i
nvol
vem
ent
in n
etw
ork
sect
or
Pric
e co
ntro
ls
Com
mun
icat
ion
and
sim
plific
atio
n of
rule
s
Adm
inis
trativ
e bu
rden
s fo
r cor
pora
tion
Adm
inis
trativ
e bu
rden
s fo
r sol
e pr
oprie
tor f
irms
Lega
l bar
riers
Antit
rust
exe
mpt
ions
Barr
iers
in n
etw
ork
sect
ors
Dis
crim
inat
ory
proc
edur
es
Reg
ulat
ory
barr
iers
Tarif
fs
08-'98 '08-'98 '08-'98 '08-'98 '08-'98 '08-'98 '08-'98 '08-'98 '08-'98 '08-'98 '08-'98 '08-'98 '08-'98
Scope of public enterprise sector 1 0.48 0.49 0.37 0.02 0.31 0.06 0.54 0.01 0.42 -0.20 -0.11 0.12
Direct control over business enterprises 0.48 1 0.29 0.42 -0.03 0.38 0.11 0.29 0.05 0.34 -0.08 0.02 0.20
Government involvement netw ork sector 0.49 0.29 1 -0.13 0.44 0.06 0.00 0.32 0.32 0.45 -0.06 0.22 0.27
Price controls 0.37 0.42 -0.13 1 -0.16 0.37 0.24 0.12 -0.22 0.25 -0.44 -0.05 -0.17
Communication and simplif ication 0.02 -0.03 0.44 -0.16 1 0.16 0.07 0.30 0.30 0.11 0.08 0.23 -0.14
Administrative burdens for corporation 0.31 0.38 0.06 0.37 0.16 1 0.46 0.22 0.08 0.39 -0.05 0.04 -0.09
Administrative burdens for sole proprietors 0.06 0.11 0.00 0.24 0.07 0.46 1 0.27 -0.01 0.06 -0.36 0.03 -0.14
Legal barriers 0.54 0.29 0.32 0.12 0.30 0.22 0.27 1 0.06 0.30 -0.14 -0.23 -0.05
Antitrust exemptions 0.01 0.05 0.32 -0.22 0.30 0.08 -0.01 0.06 1 0.32 0.56 0.07 0.28
Barriers in netw ork sectors 0.42 0.34 0.45 0.25 0.11 0.39 0.06 0.30 0.32 1 0.22 0.36 0.54
Discriminatory procedures -0.20 -0.08 -0.06 -0.44 0.08 -0.05 -0.36 -0.14 0.56 0.22 1 0.10 0.33
Regulatory barriers -0.11 0.02 0.22 -0.05 0.23 0.04 0.03 -0.23 0.07 0.36 0.10 1 0.44
Tariffs 0.12 0.20 0.27 -0.17 -0.14 -0.09 -0.14 -0.05 0.28 0.54 0.33 0.44 1
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Intermediate inputs in an Input-Output-Table
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A simulation using the Leontief-Framework
• The question:
– How would output per industry change if total final demand for services or manufacturing increased by 10%?
• The procedure:
– Leontief-approachBasic equation: ∑ ⋅−=
=
n
jjijii ymyd
1
di : final demand for goods or services of industry i,yi : gross output of industry i, mij : be the technical coefficient, i.e. the share of inputs from industry
i in total production of the input using industry j.
=> output can be computed from: with being the the Leontief-Inverse( ) 1−−MI
( ) DMIY ⋅−= −1
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Percentage change in domestic output if final demand for goods or services increased by 10%
Source: INSEE I-O-Tables, 2002, Wölfl (2006)
0
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8
12
16
20
24
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Exports servicesExports manufacturingDomestic demand servicesDomestic demand manufacturing
31
Pro-competitive regulation enhances incentives to adopt new technologies
Australia
Austria
BelgiumCanada
Denmark
Finland
France
Germany GreeceIreland
Italy
Japan
Netherlands
Portugal
Spain
Sweden
United Kingdom
United States
5
10
15
20
25
30
35
0 1 2 3 4 5 6
Average impact of regulation in ICT-using sectors , 95-03
correlation coefficient = -0.67t-statistic = -3.65
ICT share in total business investment, 95-03
Source: Arnold, Nicoletti, Scarpetta (2008)
32
Markups are lower where regulation is keener to competition
Non-manufacturing
BEL
UKUSA
CAN
AUT
GERNLD
JPNNORDNK FRA
FIN
KOR
ITA
0.10
0.15
0.20
0.25
0.30
0.35
0.40
1 1.2 1.4 1.6 1.8 2 2.2 2.4 2.6 2.8 3Product market regulation
Mark-up
Correlation coefficient = 0.82t-statistic = 5.04
Source: OECD
33
New generation: Non-tariff barriers are important Index scale of 0-6 from least to most restrictive, OECD
A. Explicit barriers to trade and investment
B. Other barriers
0.0
0.5
1.0
1.5
2.0
2.5
3.0
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Aust
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Aust
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Italy
Pola
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Ger
man
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Tariffs Barriers to FDI Barriers to market access
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Uni
ted
King
dom
Net
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Uni
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Sta
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Spai
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Hun
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Nor
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Aus
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Pola
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Ger
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Barriers to trade facilitation Differential regulatory treatment
34
… as well as regulatory quality Index scale of 0-6 from least to most restrictive, OECD
0.0
1.0
2.0
3.0
4.0
5.0Independence Influence of the executive Powers
Accountability OECD averageElectricity
0.0
1.0
2.0
3.0
4.0
5.0Independence Influence of the executive Powers
Accountability OECD averageTelecommunication