1 Export performance and product

This paper analyses the impact of product market regulation on the propensity to export at the industry level for 13 OECD countries and 13 industries over the 1977-2007 period. Recent economic policy and academic literature insists on the negative effects of product market regulation on productivity or innovation, and hence on “competitiveness", a term that we interpret as the ability to export. Similar to the conclusions of some contributions to a recent literature on competition and growth, the “common sense ” is that product market regulation should be detrimental to competitiveness. Using a two-step estimation approach we test the impact of vertically-induced pressures of product-market regulation on productivity and the effect of the latter on industry-level export performance. Results show that regulatory pressures have a significantly positive impact on productivity and thereby on the capability of an industry to attract resources and to sell its production in international markets