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Enforcing Competition and Firm Productivity

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dc.contributor.author Schiffbauer, Marc
dc.contributor.author Sampi, James
dc.date.accessioned 2019-01-31T23:18:47Z
dc.date.accessioned 2019-02-02T00:00:15Z
dc.date.available 2019-01-31T23:18:47Z
dc.date.available 2019-02-02T00:00:15Z
dc.date.issued 2019-01
dc.identifier.uri http://hdl.handle.net/10986/31182
dc.description.abstract This paper uses a unique data set that captures the elimination of subnational regulatory barriers to firm entry and competition across 1,800 municipalities and matches it with establishment census panel data to estimate the impact on establishment productivity and markups. The elimination of local barriers that were inconsistent with national legislation was the result of legal reforms that strengthened the mandate of Peru's competition authority. Legislative changes in 2013/14 empowered the competition authority to enforce the elimination of illegal, sector-specific subnational regulatory barriers to firm entry and competition, conditional on the existence of a precedence. The changes provide a unique quasi-experimental setting to identify the impact of enforcing competition within the controlled institutional environment of a single country. The paper finds that the elimination of subnational barriers to entry boosted the (revenue) productivity of establishments operating in reform municipalities and sectors relative to establishments in nonreform municipalities/sectors. But it did not raise the establishments' markups, which, if anything, declined, suggesting that physical productivity improved. The paper provides a wide range of evidence supporting a causal interpretation of this finding. The results suggest that strengthening the mandate of institutions enforcing competition is critical to raise productivity. en
dc.language English
dc.publisher World Bank, Washington, DC
dc.relation.ispartofseries Policy Research Working Paper;No. 8714
dc.rights CC BY 3.0 IGO
dc.rights.uri http://creativecommons.org/licenses/by/3.0/igo
dc.subject COMPETITION POLICY
dc.subject TOTAL FACTOR PRODUCTIVITY
dc.subject PRODUCTIVITY
dc.subject STRUCTURAL REFORM
dc.subject SUBNATIONAL GOVERNANCE
dc.title Enforcing Competition and Firm Productivity en
dc.type Working Paper en
dc.rights.holder World Bank
dc.title.subtitle Evidence from 1,800 Peruvian Municipalities en


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