No. 1455 - Productivity and entry regulation: evidence from the universe of firms
The paper analyses the effects of regulation in the service sector on productivity growth, focusing on the role of entry requirements. The intensity of regulation is measured through a new indicator at the individual economic activity level. The effects are estimated on the universe of firms, thanks to a database that includes all companies, self-employed workers and freelancers.
The analysis shows that reducing entry barriers produces significant economic benefits. Firms affected by trade liberalization measures experience stronger increases in labour productivity than the others; the rate at which firms enter the market also increases, while prices fall. Aggregate productivity growth reflects both the contribution of new entrants and the improved performance of incumbent firms.
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17 June 2024
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