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Regulation and Investment

Author

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  • Alesina, Alberto
  • Schiantarelli, Fabio
  • Ardagna, Silvia
  • Nicoletti, Giorgio

Abstract

One commonly held view about the difference between continental European countries and other OECD economies, especially the United States, is that the heavy regulation of Europe reduces its growth. Using newly assembled data on regulation in several sectors of many OECD countries, we provide substantial and robust evidence that various measures of regulation in the product market, concerning in particular entry barriers, are negatively related to investment. The policy implication of our analysis is clear: regulatory reforms, especially those that liberalize entry, are very likely to spur investment.

Suggested Citation

  • Alesina, Alberto & Schiantarelli, Fabio & Ardagna, Silvia & Nicoletti, Giorgio, 2003. "Regulation and Investment," CEPR Discussion Papers 3851, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3851
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    More about this item

    Keywords

    Regulation; investment;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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