Does regulation affect the pace and nature of innovation and if so, by how much? We build a tractable and quantifiable … sharp reduction in the firm's innovation response to exogenous demand shocks for firms just below the regulatory threshold …. We then quantitatively fit the parameters of the model to the data, finding that innovation at the macro level is about 5 …

), allows for causal interpretation of the relationship between innovation output and labor productivity. We find that knowledge … intensive services benefit from innovation activities in the sense that these activities causally increase their labor …