This paper evaluates the effects of fiscal policy on investment using a panel of OECD countries. In particular, we … investigate how different types of fiscal policy affect profits and , as a result, investment. We find a sizable negative effect … of public spending -- and in particular of its public wage component -- on business investment. This result is consistent …

product market, concerning in particular entry barriers, are negatively related to investment. The implications of our … analysis are clear: regulatory reforms, especially those that liberalize entry, are very likely to spur investment …