A note on the estimation of competition-productivity nexus: A panel quantile approach

We study the impact of product market competition on productivity in 462 US manufacturing sectors for the period 1958-2009 through the lens of a panel quantile regression analysis. We confirm that there is a nonmonotonic inverse-U relationship between competition and total factor productivity. We argue that the turning point increases substantially as we move to the higher quantiles of the productivity distribution function. Our findings survive robustness checks under alternative competition measure and quantile estimator.