Product market competition, efficiency and agency costs: An empirical analysis

@inproceedings{Griffith2001ProductMC,
  title={Product market competition, efficiency and agency costs: An empirical analysis},
  author={Rachel Griffith},
  year={2001}
}
Policy makers in Europe have been concerned that lack of product market competition have led productivity to lag behind the US. Theoretical models are ambiguous about the direction of the effect that product market competition should have on productivity. On the one hand increasing competition lowers firm's profits and thus reduces incentives to exert effort (the Schumpeterian effect), on the other hand it reduces agency costs (or increases the risk of bankruptcy) thus increasing incentives to… 

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