The Effects of service deregulation on industry growth

Abstract

This study analyses the impact of service deregulation on industry growth, to observe if industries that use less regulated services more intensively experience faster value added growth rates. Considering a sample of 18 OECD countries between two periods of time. The analysis focuses on the regulation of telecommunications, energy, transports and professional services. Results indicate that deregulating services increases industry growth in downstream manufacturing industries. Moreover, I have identified threshold effects, after some level of deregulation the regulations seem not to matter. Preliminary results indicate that foreign service dependence is the most important. Estimates are robust to accounting for different measures of financial development.