Competition, work rules and productivity

Bridgman, Benjamin

doi:10.1016/j.jedc.2014.12.008

Cited by 18 publications

(16 citation statements)

References 61 publications

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“…We also show that results are robust to dropping from the sample the guilds located in Venice, as well as to dropping trade guilds. 13 There is the concern that the effect of statutory norms on patenting is not driven by specific provisions related to entry and competition, but by other statutory rules. Specifically, the reader may worry that Strong internal regulation simply captures statutes that are very detailed, and that some other rule in these statutes may affect patenting more than those related to entry and competition.…”

Section: Resultsmentioning

confidence: 99%

“…Our analysis illustrates how occupational licensing and self-regulation may interact with the diffusion of new economic institutions. The role of internal rules and how they influence technology adoption is also the focus of Bridgman (2015), who studies why unions may favor restrictive work regulations and how these regulations may induce resistance to technology adoption. Finally, our paper adds to the literature on the relationship between competition and innovation (Aghion et al, 2005;Cohen, 2010).…”

Section: Introductionmentioning

confidence: 99%

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The Diffusion of New Institutions: Evidence from Renaissance Venice's Patent System

Comino¹,

Galasso²,

Graziano³

2017

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What factors affect the diffusion of new economic institutions? This paper examines this question exploiting the introduction of the first regularized patent system which appeared in the Venetian Republic in 1474. We begin by developing a model which links patenting activity of craft guilds with provisions in their statutes. The model predicts that guild statutes that are more effective at preventing outsider's entry and at mitigating price competition lead to less patenting. We test this prediction on a new dataset which combines detailed information on craft guilds and patents in the Venetian Republic during the Renaissance. We find a negative association between patenting activity and guild statutory norms which strongly restrict entry and price competition. We show that guilds which originated from medieval religious confraternities were more likely to regulate entry and competition, and that the effect on patenting is robust to instrumenting guild statutes with their quasi-exogenous religious origin. We also find that patenting was more widespread among guilds geographically distant from Venice, and among guilds in cities with lower political connection which we measure exploiting a new database on noble families and their marriages with members of the great council. Our analysis suggests that local economic and political conditions may have a substantial impact on the diffusion of new economic institutions. 1 We thank Dan Trefler, Kevin Bryan, Hugo Hopenhayn, Nicola Lacetera, Hong Luo, Petra Moser, and Michel Serafinelli for helpful comments. We thank seminar participants at CESifo in Munich, the International IO Conference in Boston, the University of Trieste, and the University of Toronto. We are indebted to Roberto Berveglieri for numerous discussions about the Venetian patent systems, and to Giovanni Caniato, Michael Knapton, Luca Molà, Lavinia Parziale, Luciano Pezzolo, and Andrea Zannini for providing insightful details on the Venetian Republic and its guild system. AbstractWhat factors affect the diffusion of new economic institutions? This paper examines this question exploiting the introduction of the first regularized patent system which appeared in the Venetian Republic in 1474. We begin by developing a model which links patenting activity of craft guilds with provisions in their statutes. The model predicts that guild statutes that are more effective at preventing outsider's entry and at mitigating price competition lead to less patenting. We test this prediction on a new dataset which combines detailed information on craft guilds and patents in the Venetian Republic during the Renaissance. We find a negative association between patenting activity and guild statutory norms which strongly restrict entry and price competition. We show that guilds which originated from medieval religious confraternities were more likely to regulate entry and competition, and that the effect on patenting is robust to instrumenting guild statutes with their quasi-exogenous religious origin. We also find tha...

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Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Diffusion of New Institutions: Evidence from Renaissance Venice's Patent System

Comino¹,

Galasso²,

Graziano³

2017

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“…The union's problem thus appears as

\underset{e, w}{trueprefixmax} W false(w, 1 - e, B (e, w) false),

where

b = B (e, w)

is the firm's decision rule for bodies that arises from problem . Here, as in Bridgman (), the union makes its decision in a unilateral fashion, while taking in account the firm's demand for bodies.…”

Section: Alternative Union Paradigmsmentioning

confidence: 99%

“…Bridgman () also models the problem of a union facing a monopoly firm. He formulates workplace rules as a simple fixed cost in terms of employment.…”

Section: Introductionmentioning

confidence: 99%

Mining Surplus: Modeling James A. Schmitz's Link Between Competition and Productivity

Greenwood

Weiss

2018

Int Economic Review

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James A. Schmitz documents, in a well‐known case study (Journal of Political Economy 113 (2005), 582–625), a dramatic rise in productivity in the American and Canadian iron‐ore industry following an increase in competition from Brazil. Prior to the increased competition, the industry was not competitive. Economic profits were divided between business and unions. Schmitz attributes the increase in productivity to a change in work practices in the industry, as old negotiated union work rules were abandoned or modified. This research formalizes a mechanism through which a rise in competition can lead to increased productivity in the iron‐ore industry.

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“…One voice arguing that monopoly has large costs isParente and Prescott (2000); see alsoBridgman (2015).…”

mentioning

confidence: 99%

Cartels Destroy Productivity: Evidence from the New Deal Sugar Manufacturing Cartel, 1934-74

Bridgman¹,

Qi²,

Schmitz

2015

Preprint

Self Cite

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The idea that cartels might reduce industry productivity by misallocating production from high to low productivity producers is as old as Adam. However, the study of the economic consequences of cartels has almost exclusively focused on the losses from higher prices (i.e., Harberger triangles). Yet, as the old idea suggests, we show that the rules for quotas and side payments in the New Deal sugar cartel led to significant misallocation of production. The resulting productivity declines essentially destroyed the entire cartel profit. The magnitude of the deadweight losses (relative to value added) was large: we estimate a lower bound for the losses equal to 25 percent and 42 percent in the beet and cane industries, respecttively.

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Competition, work rules and productivity

Cited by 18 publications

References 61 publications

The Diffusion of New Institutions: Evidence from Renaissance Venice's Patent System

The Diffusion of New Institutions: Evidence from Renaissance Venice's Patent System

Mining Surplus: Modeling James A. Schmitz's Link Between Competition and Productivity

Cartels Destroy Productivity: Evidence from the New Deal Sugar Manufacturing Cartel, 1934-74

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