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Macroeconomic effects of ownership structure in OECD countries

Author

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  • Donatella Gatti

    (IZA - Institute for the Study of Labor, CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres, PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPN - Centre d'Economie de l'Université Paris Nord (ancienne affiliation) - UP13 - Université Paris 13 - CNRS - Centre National de la Recherche Scientifique)

Abstract
The paper investigates the impact of ownership concentration on GDP growth, for a sample of 18 OECD countries over the period 1980 to 2004. The econometric analysis shows that more concentrated ownership can speed up growth, for countries approaching the technological frontier, provided that labour market regulation is sufficiently tight. In the absence of employment regulation, the logic of financial markets discipline applies and dispersed ownership appears as more favorable for growth. Based on econometric results, impact coefficients are calculated allowing to evaluate the growth points gained/lost following a given change in ownership concentration. This exercise reveals that a reform in the domain of ownership structure can yield sizeable effects in terms of growth. Importantly, these effects are unequally distributed across countries: Anglo-Saxon countries would take more advantage of deregulation (i.e. increased dispersion of ownership in a context of deregulated labour markets) while continental European countries would benefit more from increased concentration of ownership in a context of reinforced labour regulation.

Suggested Citation

  • Donatella Gatti, 2008. "Macroeconomic effects of ownership structure in OECD countries," PSE Working Papers halshs-00586850, HAL.
    • Handle: RePEc:hal:psewpa:halshs-00586850
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00586850
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    References listed on IDEAS

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    Cited by:

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    2. Michael Brookes & Philip James & Marian Rizov, 2018. "Employment regulation and productivity: Is there a case for deregulation?," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 39(3), pages 381-403, August.
    3. Simon Deakin & Jonas Malmberg & Prabirjit Sarkar, 2013. "Do Labour Laws Increase Equality at the Expense of Higher Unemployment? The Experience of Six OECD Countries, 1970-2010," Working Papers wp442, Centre for Business Research, University of Cambridge.
    4. Simon Deakin, 2013. "The Legal Framework Governing Business Firms & its Implications for Manufacturing Scale & Performance: The UK Experience in International Perspective," Working Papers wp449, Centre for Business Research, University of Cambridge.
    5. Lars P. Feld & Jost H. Heckemeyer, 2011. "Fdi And Taxation: A Meta‐Study," Journal of Economic Surveys, Wiley Blackwell, vol. 25(2), pages 233-272, April.
    6. Simon Deakin & Prabirjit Sarkar, 2008. "Assessing the Long-Run Economic Impact of Labour Law Systems: A theoretical Reappraisal and Analysis of New Time Series Data," Working Papers wp367, Centre for Business Research, University of Cambridge.
    7. Simon DEAKIN & Jonas MALMBERG & Prabirjit SARKAR, 2014. "How do labour laws affect unemployment and the labour share of national income? The experience of six OECD countries, 1970–2010," International Labour Review, International Labour Organization, vol. 153(1), pages 1-27, March.
    8. Emiliano Brancaccio & Raffaele Giammetti & Milena Lopreite & Michelangelo Puliga, 2023. "Convergence in solvency and capital centralization: A B‐VAR analysis for high‐income and euro area countries," Metroeconomica, Wiley Blackwell, vol. 74(1), pages 40-73, February.
    9. Brancaccio, Emiliano & Giammetti, Raffaele & Lopreite, Milena & Puliga, Michelangelo, 2019. "Monetary policy, crisis and capital centralization in corporate ownership and control networks: A B-Var analysis," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 55-66.

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    More about this item

    Keywords

    ownership concentration; labour market regulation; growth; developed countries;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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