01129nam a22001457a 4500 525333 525333 240222b ||||| |||| 00| 0 eng d Aghion, P. Bergeaud, A. and Reenen, J.V. 50064 The impact of regulation on innovation The American Economic Review 113(11), Nov, 2023: p.2894-2936 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.- Reproduced https://www.aeaweb.org/articles?id=10.1257/aer.20210107 The American Economic Review INNOVATION AR 0 0 ddc 0 0 400391 IIPA IIPA 2024-02-22 113(11), Nov, 2023: p.2894-2936 AR131131 2024-02-22 AR