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Impact of macro‐structural reforms on the productivity growth of regions: Distance to the frontier matters
Author(s) -
D’Costa Sabine,
Garcilazo Jose Enrique,
Oliveira Martins Joaquim
Publication year - 2019
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/pirs.12346
Subject(s) - openness to experience , productivity , lagging , frontier , economics , panel data , investment (military) , economic geography , international economics , macroeconomics , geography , political science , medicine , psychology , social psychology , archaeology , pathology , politics , law , econometrics
Using a panel of 265 regions from 24 OECD countries from 1997 to 2007, we explore the impact of nation‐wide macroeconomic and structural policies on the productivity growth of subnational regions. We find that average relationships between nation‐wide policies and regional productivity growth can hide strong differentiated effects according to the distance to the frontier: relaxing employment protection legislation on temporary contracts, lowering barriers to trade and investment and increasing trade openness enhances productivity growth in lagging regions, whereas reducing barriers to entrepreneurship or higher levels of government debt has a positive effect on regions closer to the productivity frontier.