01042nam a22001097a 4500008004100000100004600041245004300087260003400130300003600164520069800200773003400898240222b           ||||| |||| 00| 0 eng d  aAghion, P. Bergeaud, A. and Reenen, J.V.   aThe impact of regulation on innovation  aThe American Economic Review   a113(11), Nov, 2023: p.2894-2936  aWe 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.- Reproduced 

https://www.aeaweb.org/articles?id=10.1257/aer.20210107
  aThe American Economic Review