The Impact of Regulation on Innovation

• 成果类型: Article
• 署名作者: Aghion, Philippe; Bergeaud, Antonin; Van Reenen, John
• 署名单位: Universite PSL; College de France; INSEAD Business School; Hautes Etudes Commerciales (HEC) Paris; University of London; London School Economics & Political Science; Massachusetts Institute of Technology (MIT)
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20210107
• 发表日期: 2023
• 页码: 2894-2936
• 关键词: research-and-development; employment protection; size distribution; firing costs; PRODUCTIVITY; GROWTH; FIRMS; misallocation; distortions; TECHNOLOGY

摘要

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.