Innovating Under Pressure? Regulatory Intensity and Corporate Innovation
Year: 2024
Type: article
Abstract: We investigate the impact of regulatory intensity on innovation outcomes. We examine U.S. publicly listed firms, utilizing a novel firm-level measure of exposure to all federal regulations. The study reveals that highly regulated companies tend to exhibit lower patent value, a reduction in patent filings, and a decrease in patent citations. The results suggest additional costs imposed on firms burdened by heavy regulations. Furthermore, financial distress and political connections mitigate this negative effect. Overall, the paper uncovers a previously undiscovered connection between regulation at an aggregate level and innovation, emphasizing circumstances where regulations may impose costs that outweigh potential benefits.
Author: Mak, Christy
Language: English
Topic: Firm Innovation and Growth
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7029066181
FWCI:
Cites:
Cited by:
Related to: