Thursday, April 8, 2010
Posted by D. Daniel Sokol
Sandra Ospina (IMF) and Marc Schiffbauer (World Bank) explain Competition and Firm Productivity: Evidence from Firm-Level Data.
ABSTRACT: This paper presents empirical evidence on the impact of competition on firm productivity. Using firm-level observations from the World Bank Enterprise Survey database, we find a positive and robust causal relationship between our proxies for competition and our measures of productivity. We also find that countries that implemented product-market reforms had a more pronounced increase in competition, and correspondingly, in productivity: the contribution to productivity growth due to competition spurred by product-market reforms is around 12-15 percent.