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Business regulation and business investment: evidence from US manufacturing 1970–2009

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  • Brandon Pizzola

    (George Mason University)

Abstract

Regulation is often portrayed as placing a substantial burden on US businesses and the overall US economy. Moreover, policy options of “cutting red tape” and “reducing federal bureaucracy” are often asserted to be a way to stimulate investment and, through this channel, a way to promote economic growth. This paper examines the relationship between growth in regulatory restrictions in the Code of Federal Regulations and manufacturing investment in the United States over the 1970–2009 period. An industry-level dataset is constructed by mapping the novel industry-specific RegData dataset from the Mercatus Center at George Mason University to the comprehensive industry-specific manufacturing data in the NBER-CES Manufacturing Industry Database. In total, the constructed dataset includes 337 manufacturing industries. This approach yields substantial evidence that increased business regulation is associated with decreased business investment.

Suggested Citation

  • Brandon Pizzola, 2018. "Business regulation and business investment: evidence from US manufacturing 1970–2009," Journal of Regulatory Economics, Springer, vol. 53(3), pages 243-255, June.
    • Handle: RePEc:kap:regeco:v:53:y:2018:i:3:d:10.1007_s11149-018-9356-z
    DOI: 10.1007/s11149-018-9356-z
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    References listed on IDEAS

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    Cited by:

    1. Patrick A. McLaughlin & Oliver Sherouse, 2019. "RegData 2.2: a panel dataset on US federal regulations," Public Choice, Springer, vol. 180(1), pages 43-55, July.

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    Investment; Business regulation;

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