The Organisation for Economic Co-operation and Development, based in Paris, has for years preached about the urgent need for Europe to pursue labour-and product-market reforms, so as to lift productivity growth and create jobs. So yet another study on the subject is likely to be greeted with a yawn; but that would be a pity. For this time the OECD has used new data on individual companies in different countries to shed more light on its earlier, macroeconomic studies of what drives growth. The OECD has compiled a database of companies' activities in ten rich countries. Using this data, its new study examines the impact that regulation of product and labour markets has on productivity, and particularly the ways in which regulation might deter entrepreneurs from setting up new firms.
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