Aghion, Philippe; Bergeaud, Antonin; Van Reenen, John - 2021
Does regulation affect the pace and nature of innovation and if so, by how much? We build a tractable and quantifiable ….4% lower due to the regulation, a 2.2% consumption equivalent welfare loss. Four-fifths of this loss is due to lower innovation … intensity per firm rather than just a misallocation towards smaller firms and lower entry. We generalize the theory to allow for …