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Rent Building, Rent Sharing: A Panel Country-Industry Empirical Analysis

Author

Listed:
  • Askenazy, Philippe

    (CNRS)

  • Cette, Gilbert

    (Bank of France)

  • Maarek, Paul

    (University of Cergy-Pontoise)

Abstract
Through panel estimates using OECD country-industry statistics, this paper aims to clarify the determinants of rent creation and the mechanisms of rent sharing, and the role of market regulations in these processes. The empirical analysis is carried out in two steps. The first explains the rent creation process. For each country-industry-year observation, the size of rents, measured by the value added price relative to the GDP price, is assumed to depend solely on direct anti-competitive regulations on services and goods. The second step explains the rent sharing process. Three destinations of rents are distinguished for each country-industry-year observation: upstream industries, capital and labour. The main empirical findings are as follows. Regarding the rent creation, direct anti-competitive regulations are associated with a very significant rise in rent size. Concerning the rent sharing, the capital share in value added appears to i) increase with rent size, decrease with anti-competitive regulation in upstream sectors and increase with the industry specific output gap; ii) decrease with the national output gap, increase with the national employment rate and decrease with employment protection regulation; iii) increase with the interaction of rent size and the unemployment rate and decrease with the interaction of rent size and employment protection regulations. These results confirm the existence of three destinations for rents. They also show that the magnitude of each destination depends on the market power of its beneficiary. All these results are robust to a variety of sensitivity checks.

Suggested Citation

  • Askenazy, Philippe & Cette, Gilbert & Maarek, Paul, 2012. "Rent Building, Rent Sharing: A Panel Country-Industry Empirical Analysis," IZA Discussion Papers 6443, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6443
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    References listed on IDEAS

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    Cited by:

    1. Ibarra, Carlos A. & Ros, Jaime, 2019. "The decline of the labor income share in Mexico, 1990–2015," World Development, Elsevier, vol. 122(C), pages 570-584.
    2. Nils aus dem Moore, 2014. "Shifting the Burden of Corporate Taxes: Heterogeneity in Direct Wage Incidence," Ruhr Economic Papers 0531, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    3. aus dem Moore, Nils, 2014. "Shifting the Burden of Corporate Taxes: Heterogeneity in Direct Wage Incidence," Ruhr Economic Papers 531, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2018. "Rent Creation and Sharing: New Measures and Impactson TFP," NBER Working Papers 24426, National Bureau of Economic Research, Inc.
    5. Thang Ngoc Bach & Canh Quang Le & Thang Van Nguyen, 2021. "Rent Sharing, Investment, and Collective Bargaining: Evidence from Employee‐Level Data in Vietnam," The Developing Economies, Institute of Developing Economies, vol. 59(1), pages 3-38, March.
    6. Cette, G. & Lopez, J. & Mairesse, J., 2016. "What is the macroeconomic impact of ambitious structural reforms on product and labour markets?," Rue de la Banque, Banque de France, issue 27, june..
    7. Cette, G. & Lopez, J. & Mairesse, J., 2015. "Les effets macroéconomiques sur la productivité et les prix de vastes réformes structurelles sur les marchés des biens et du travail," Bulletin de la Banque de France, Banque de France, issue 199, pages 1-19.
    8. Michel-Pierre Chélini & Georges Prat, 2019. "Verständnis der langfristigen Dynamik von Arbeitslosigkeit und Löhnen in Frankreich [Understanding the Long Run Dynamics of French Unemployment and Wages]," Post-Print hal-04400810, HAL.
    9. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2016. "Product and Labour Market Regulations, Production Prices, Wages and Productivity," Review of Economics and Institutions, Università di Perugia, vol. 7(2).
    10. repec:zbw:rwirep:0531 is not listed on IDEAS
    11. Kopel, Michael & Petrakis, Emmanuel & Ressi, Anna, 2019. "Endogenous scope of firm-union bargaining with vertical pay comparisons," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 39-52.
    12. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2019. "Rent Creation And Rent Sharing: New Measures And Impacts On Total Factor Productivity," Economic Inquiry, Western Economic Association International, vol. 57(4), pages 1915-1938, October.
    13. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2016. "Market Regulations, Prices, and Productivity," American Economic Review, American Economic Association, vol. 106(5), pages 104-108, May.

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    More about this item

    Keywords

    market regulations; prices; capital share; rents; output gap; unemployment;
    All these keywords.

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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