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Regulations and technology gap in Europe: The role of firm dynamics

Sara Amoroso and Roberto Martino

European Economic Review, 2020, vol. 129, issue C

Abstract: In this paper, we develop a new firm-level measure of distance to the productivity frontier that accounts for international technology spillovers stemming from the use of imported intermediate goods. The trade-weighted technological distance to frontier is matched with sector- and country-level data on regulation and firm dynamics (entry and exit rates) of 16 European countries. Using our measure of trade-adjusted technology gap, we investigate the role of labour, capital, and product market regulatory frameworks in the technology catch-up process, gauging the effect of firms’ dynamics in mediating and moderating the impact of regulation on the technology gap.

Keywords: Innovation diffusion; Framework conditions; Business dynamics; Technological frontier; Intermediate inputs; Technology spillovers (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:129:y:2020:i:c:s0014292120301811

DOI: 10.1016/j.euroecorev.2020.103551

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