VoxEU Video Productivity and Innovation

Does regulation stop innovation?

Regulation is often blamed for inhibiting innovation. In this interview for Vox, John Van Reenen (Ronald Coase Chair in Economics and School Professor, Department of Economics at the London School of Economics, and CEPR Research Fellow) argues that the basis for this claim is weak. A study of firm-level innovation in France, where various labour regulations kick in once a firm reaches 50 employees, reveals that while innovation does fall among firms just below this threshold, the innovations that are discouraged tend to be relatively low-value innovations that have little impact on economic growth.