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The impact of regulation on innovation

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  • Philippe Aghion

Abstract

It is widely feared that private sector innovation is constrained by 'red tape'. Philippe Aghion and colleagues test that view on data from France, where firms of more than 50 employees face far heavier regulatory obligations. The results suggest that regulations do hamper innovation - but the negative effects are only for incremental innovations, not radical innovations.

Suggested Citation

  • Philippe Aghion, 2021. "The impact of regulation on innovation," CentrePiece - The magazine for economic performance 607, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepcnp:607
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    File URL: https://cep.lse.ac.uk/pubs/download/cp607.pdf
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    Citations

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    Cited by:

    1. Francesco Trebbi & Miao Ben Zhang, 2022. "The Cost of Regulatory Compliance in the United States," NBER Working Papers 30691, National Bureau of Economic Research, Inc.
    2. Stephen Ayerst & Loren Brandt & Diego Restuccia, 2023. "Distortions, Producer Dynamics, and Aggregate Productivity: A General Equilibrium Analysis," Working Papers tecipa-748, University of Toronto, Department of Economics.
    3. Rachel Griffith & John Van Reenen, 2021. "Product market competition, creative destruction and innovation," IFS Working Papers W21/43, Institute for Fiscal Studies.
    4. Da-Rocha, José-María & Restuccia, Diego & Tavares, Marina M., 2023. "Policy distortions and aggregate productivity with endogenous establishment-level productivity," European Economic Review, Elsevier, vol. 155(C).
    5. Andreas Teichgraeber & John Van Reenen, 2022. "A policy toolkit to increase research and innovation in the European Union," POID Working Papers 025, Centre for Economic Performance, LSE.
    6. Philippe Askenazy & Thomas Breda & Flavien Moreau & Vladimir Pecheu, 2022. "Do French companies under-report their workforce at 49 employees to get around the law?," Post-Print halshs-03693461, HAL.
    7. Philippe Askenazy & Thomas Breda & Vladimir Pecheu, 2022. "Under-Reporting of Firm Size Around Size-Dependent Regulation Thresholds: Evidence from France," PSE Working Papers halshs-03614750, HAL.
    8. García-Vega, María & Kneller, Richard & Stiebale, Joel, 2021. "Labor market reform and innovation: Evidence from Spain," Research Policy, Elsevier, vol. 50(5).
    9. Bofinger, Peter & Geißendörfer, Lisa & Haas, Thomas & Mayer, Fabian, 2023. "Credit as an instrument for growth: A monetary explanation of the Chinese growth story," W.E.P. - Würzburg Economic Papers 107, University of Würzburg, Department of Economics.
    10. Bottasso, Anna & Bratti, Massimiliano & Cardullo, Gabriele & Conti, Maurizio & Sulis, Giovanni, 2023. "Labor Market Regulation and Firm Adjustments in Skill Demand," IZA Discussion Papers 16262, Institute of Labor Economics (IZA).
    11. Alex Coad, 2022. "Lumps, Bumps and Jumps in the Firm Growth Process," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 18(4), pages 212-267, April.
    12. Philippe Askenazy & Thomas Breda & Flavien Moreau & Vladimir Pecheu, 2022. "Les entreprises sous-déclarent-elles leur effectif à 49 salariés pour contourner la loi ?," Institut des Politiques Publiques halshs-03828712, HAL.
    13. Rafiou Raphaël Bétila, 2021. "The impact of Ease of Doing Business on economic growth: a dynamic panel analysis for African countries," SN Business & Economics, Springer, vol. 1(10), pages 1-34, October.
    14. MORIKAWA Masayuki, 2022. "Compliance Costs of Regulations and Productivity," Policy Discussion Papers 22025, Research Institute of Economy, Trade and Industry (RIETI).
    15. Wasapon Thanabodypath & Achara Chandrachai & Sudkate Chaiyo & Orawon Chailapakul, 2021. "Industrial Buyer Innovation Adoption Model: A Focus on a Smartphone-Based Electrochemical Analytical Device for Toxic Heavy Metal Detection," Sustainability, MDPI, vol. 13(21), pages 1-21, October.
    16. Diana W. Thomas & Michael D. Thomas, 2022. "Regulation, competition, and the social control of business," Public Choice, Springer, vol. 193(1), pages 109-125, October.
    17. Chih-Hai Yang, 2023. "R&D responses to labor cost shock in China: does firm size matter?," Small Business Economics, Springer, vol. 61(4), pages 1773-1793, December.
    18. Masayuki Morikawa, 2023. "Compliance costs and productivity: an approach from working hours," Journal of Regulatory Economics, Springer, vol. 63(3), pages 117-137, June.
    19. de Rassenfosse, Gaétan & Palangkaraya, Alfons, 2023. "Do patent pledges accelerate innovation?," Research Policy, Elsevier, vol. 52(5).

    More about this item

    Keywords

    innovation; policy; France; regulation; growth;
    All these keywords.

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