No abstract

Several recent policy and academic contributions consider that liberalising product markets would foster innovation and growth. This paper analyses the innovationproductivity relationship at the industry-level for a sample of OECD manufacturing industries. We pay particular attention to the vertically-induced in ‡uence of product market regulation (PMR) of key input sectors of the economy on the innovative process of manufacturing and its consequences on productivity. We test for a di¤erentiated e¤ect of this type of PMR depending on whether countries are technological leaders or laggards in a given industry and for a given time period. Contrary to the most widespread policy claims, the innovation-boosting e¤ects of liberalisation policies at the leading edge are systematically not supported by the data. These …ndings question the relevance of a research and innovation policy based on liberalisation.

We analyze the impact of trade integration on plant TFP using Chilean plant-level data (1982)(1983)(1984)(1985)(1986)(1987)(1988)(1989)(1990)(1991)(1992)(1993)(1994)(1995)(1996)(1997)(1998)(1999)) and 3-digit bilateral trade flows. Our contribution is to disentangle the impact of export and import barriers, estimated as border effects within a multilateral context. A fall in export barriers is positively correlated with plant productivity in traded sectors. The reduction of import barriers, however, can only be associated to productivity improvements in export-oriented sectors. In import-competing sectors a robust positive correlation shows up between plant productivity and protection. We then test several channels linking trade integration and firm productivity.