 The Impact of Regulation on InnovationPhilippe Aghion (),
Antonin Bergeaud and
John van Reenen
Post-Print from HAL Abstract: We present a framework that can be used to assess the equilibrium impact of regulation on endogenous innovation with heterogeneous firms. We implement this model using French firm-level panel data, where there is a sharp increase in the burden of labor regulations on companies with 50 or more employees. Consistent with the model's qualitative predictions, we find a fall in the fraction of innovating firms just to the left of the regulatory threshold. Furthermore, we find a reduction in the innovation response of firms to demand shocks just below the threshold. Regulation reduces aggregate innovation by 5.7 percent. Date: 2023-11 Published in American Economic Review, 2023, 113 (11), pp.2894-2936. ⟨10.1257/aer.20210107⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-04330712 DOI: 10.1257/aer.20210107 Access Statistics for this paper More papers in Post-Print from HAL |
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