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Title: Corruption and the regulation of innovation
Author: De Chiara, Alessandro
Manna, Ester
Keywords: Gestió de la innovació
Innovacions tecnològiques
Seguretat jurídica
Innovation management
Technological innovations
Legal certainty
Issue Date: 2019
Publisher: Universitat de Barcelona. Facultat d'Economia i Empresa
Series/Report no: [WP E-Eco19/390]
Abstract: We study the optimal design of regulation for innovative activities which can have negative social repercussions. We compare two alternative regimes which may provide firms with different incentives to innovate and produce: lenient authorization and strict authorization. We find that corruption plays a critical role in the choice of the authorization regime. Corruption exacerbates the costs of using lenient authorization, under which production of socially harmful goods is always authorized. In contrast, corruption can be socially beneficial under strict authorization, since it can mitigate an over-investment problem. In the second part of the paper, we explore the design of bonuses, taxes, and ex-post liability to improve the regulatory outcome.
It is part of: UB Economics – Working Papers, 2019, E19/390
Appears in Collections:UB Economics – Working Papers [ERE]

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