Abstract
As part of its Single Market Program the European Commission commanded the liberalization and regulatory harmonization of utilities, transport and telecommunication network services. This paper investigates whether and how this process affected the productivity of European network firms.
We exploit the variation in the timing and degree of liberalization efforts across countries/industries and find that liberalization increased firm-level productivity, but had no reallocation impact. Based on our estimates, the average firm-level productivity gains from liberalization amount to 38 percent of the actual average within-firm productivity change in network industries.
The results provide support for the growth-promoting role of liberalization efforts.