Regulation and Productivity in the Auto and Steel Industries. Volume 2. Main Report

摘要

The results are presented of a study undertaken to investigate the effect of regulation on productivity in the auto and steel industries from 1958 through 1980. Numerical measures of regulation are developed and employed in two empirical models: in the single equation model, the level or rate of growth of productivity is estimated as a function of output, technology, regulation, and other variables; in the multi-equation model, cost and input cost shares are jointly estimated as a function of input prices, output, technology, and regulation. Results reveal that the estimated effect of regulation on productivity varied. For example, the multi-equation model indicated a positive effect of regulation on productivity in the steel industry but a negative effect on the auto industry. From 1973 to 1980, regulation of the auto industry is estimated to have lowered the annual rate of productivity by 0.55 to 2.00 percentage points, depending on the measures of output and regulation.