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Title: Corruption, regulation, and investment incentives
Author: De Chiara, Alessandro
Manna, Ester
Keywords: Corrupció
Gestió de la innovació
Innovacions tecnològiques
Innovation management
Technological innovations
Issue Date: 1-Feb-2022
Publisher: Elsevier B.V.
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. Hence, more pervasive corruption favors the adoption of a strict authorization regime and may increase welfare.
Note: Reproducció del document publicat a:
It is part of: European Economic Review, 2022, vol. 142, num. 104009, p. 1-21
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ISSN: 0014-2921
Appears in Collections:Articles publicats en revistes (Economia)

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