Data and Code for the paper "The Impact of Regulation on Innovation"
Principal Investigator(s): View help for Principal Investigator(s) Philippe Aghion, Collège de France, INSEAD, LSE; Antonin Bergeaud, HEC Paris; John Van Reenen, LSE
Version: View help for Version V1
| Name | File Type | Size | Last Modified |
|---|---|---|---|
| CODE | 08/31/2023 04:40:PM | ||
| DATA | 06/13/2023 02:17:PM | ||
| OUT | 08/31/2023 04:45:PM | ||
| TMP | 06/13/2023 02:15:PM | ||
|
|
application/pdf | 1 MB | 08/31/2023 07:21:AM |
|
|
application/pdf | 1.8 MB | 08/31/2023 12:41:PM |
|
|
application/pdf | 114.6 KB | 08/31/2023 07:20:AM |
Project Citation:
Aghion, Philippe, Bergeaud, Antonin, and Van Reenen, John. Data and Code for the paper “The Impact of Regulation on Innovation.” Nashville, TN: American Economic Association [publisher], 2023. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2023-10-20. https://doi.org/10.3886/E192169V1
Project Description
Summary:
View help for Summary
Replication package for the paper "The Impact of Regulation on Innovation", by Philippe Aghion, Antonin Bergeaud and John Van Reenen.
Abstract
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 sharp fall in the fraction of innovating firms just to the left of the regulatory threshold. Furthermore, we find a sharp reduction in the positive innovation response of firms to exogenous demand shocks just below the regulatory threshold. Using the structure of our model we quantitatively estimate parameters and find that the regulation reduces aggregate equilibrium innovation (and growth) by 5.7% which translates into a consumption equivalent welfare loss of at least 2.2%, approximately doubling the static losses in the existing literature.
Abstract
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 sharp fall in the fraction of innovating firms just to the left of the regulatory threshold. Furthermore, we find a sharp reduction in the positive innovation response of firms to exogenous demand shocks just below the regulatory threshold. Using the structure of our model we quantitatively estimate parameters and find that the regulation reduces aggregate equilibrium innovation (and growth) by 5.7% which translates into a consumption equivalent welfare loss of at least 2.2%, approximately doubling the static losses in the existing literature.
Scope of Project
Subject Terms:
View help for Subject Terms
innovation;
regulation;
firm dynamics
JEL Classification:
View help for JEL Classification
J80 Labor Standards: General
L11 Production, Pricing, and Market Structure; Size Distribution of Firms
L25 Firm Performance: Size, Diversification, and Scope
L51 Economics of Regulation
O31 Innovation and Invention: Processes and Incentives
J80 Labor Standards: General
L11 Production, Pricing, and Market Structure; Size Distribution of Firms
L25 Firm Performance: Size, Diversification, and Scope
L51 Economics of Regulation
O31 Innovation and Invention: Processes and Incentives
Time Period(s):
View help for Time Period(s)
1/1/1994 – 12/31/2012 (1994-2012)
Related Publications
Published Versions
Report a Problem
Found a serious problem with the data, such as disclosure risk or copyrighted content? Let us know.
This material is distributed exactly as it arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.