How Can We Boost Competition in the Services Sector? (eBook)

Cover 1
I Introduction 16
I.1 Overall Productivity and Product Market Regulation 16
References 20
I.2 Competition in the Services Sector 22
II The Practical View 24
II.1 24
II.2 29
II.3 35
References 40
III Which Structural Reforms for Europe? 42
Executive Summary 42
1 What are structural reforms and why are they important? 43
1.1 What are structural reforms? 43
1.2 Why structural reforms are important for growth 45
1.3 Why structural reforms matter for the euro area 48
2 What are the recommendations? 51
2.1 How to make sense of laundry lists 51
2.2 Deriving consensus reform lists 52
3 How to prioritize structural reforms? 58
3.1 Growth effects 58
3.2 Contribution to euro area stability 60
3.3 Political feasibility 61
4 Conclusion: The euro area reform priorities on a single page 64
Appendix 67
References 82
IV Past Reforms in the Services Sector and their Effects 86
IV.1 Introduction 86
IV.2 Entry regulation and entrepreneurship: a natural experiment in German craftsmanship 88
Abstract 88
1 Introduction 88
2 The amendment to the German Trade and Crafts Code in 2004 as a natural experiment 91
3 Empirical specification 93
3.1 Definition of the treatment and control groups 93
3.2 Trends in craftsmanship 94
3.3 Identification of causal effects 97
3.4 Other entrepreneurship policies 99
3.5 Estimation procedure 101
4 Data and descriptives 103
4.1 Sample design 103
4.2 Descriptives 105
5 Results 110
5.1 Treatment effects on transition probabilities 113
5.2 Treatment effects on self-employment probabilities 115
5.3 Heterogeneous treatment effects 117
5.4 Specification and sensitivity tests 121
6 Summary and conclusions 124
Appendix 125
References 130
IV.3 Structural Reforms in Transportations: Dynamics and Sectorial Spillovers 133
Abstract 133
1 Introduction 133
2 Literature Review 135
3 Methodology 142
3.1 Data preparation 143
3.2 Panel VAR 143
3.3 Robustness 146
4 Data 147
4.1 The CompNet firm-level-based database 147
4.2 OECD’s database on Product Market Regulations 151
5 Results 153
5.1 Baseline specification 153
5.2 Labour costs 155
5.3 Productivity 156
5.4 Resources allocation 157
5.5 Competition and concentration 159
6 Conclusions 161
Annex 162
Annex A 162
Annex B 165
References 165
IV.4 Discussion 169
Dr Stefan Profit 169
Dr Davud Rostam-Afschar 172
Paolo Mengano 173
V How to Assess the Economic Impact of Regulation – Recent Developments in Europe and Germany and Outlook to the Next Step 176
V.1 Services liberalisation in Germany: Overview and the potential of deregulation 176
Executive Summary 176
1 Introduction 177
2 The German services market – definition and overview 178
3 Services gap – the relationship between the services sector and the manufacturing sector 185
4 Empirical survey of the status quo of the regulation in the services sector 193
5 Endeavours to deregulate the services market 198
6 Economic effects of services deregulation 200
6.1 Direct effects 201
6.2 Indirect effects 203
6.3 Effects on imports and exports 207
6.4 Labour market effects 208
6.5 Impacts on consumers 209
7 Politico-economic considerations for services liberalisation 210
8 Approaches for reform for Germany 212
8.1 Approaches for reform 213
8.2 Model based estimation of the welfare effects 218
9 Conclusion 219
Appendix 221
Appendix A: Empirical Analysis for Germany 221
Regression model and data basis 222
Model results 225
Categorising the model results 234
Appendix B: Operating surplus in a national and international comparison 234
References 236
V.2 Economic impact of competition-friendly deregulation in Germany's professional services 240
Abstract 240
1 Motivation 240
2 Measuring performance of professional services: Mark-ups and allocative efficiency 243
2.1 Mark-ups 243
2.2 Allocation of productive resources 244
3 Product market regulations and impact of reforms 247
4 Potential impact of structural reforms: Closing-the-policy-gap approach 251
(i) Regulation and mark-ups 252
(ii) Regulation and allocative efficiency 254
5 Economy-wide effects: Simulations with QUEST 256
6 Concluding remarks 259
References 261
V.3 Discussion 263
Erik Canton 266
Oliver Arentz 267
VI Conclusions 268