Does market structure affect labour productivity and wages? Evidence from a smooth coefficient semiparametric panel model

This paper investigates the impact of market structure on labour productivity and wages using a panel data set of US manufacturing industries over the period 1958-2007. To account for nonlinear effects, we employ a smooth coefficient semiparametric model (SCSM). We find evidence in support of a nonlinear relationship between market concentration and labour productivity and wages. Lastly, our empirical findings shed new light on the competition-labour productivity nexus.