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Regulation in the Network Sectors: Impact on the Innovation Process and the Employment Rate

Author

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  • Océane Vernerey

    (LEDi - Laboratoire d'Economie de Dijon [Dijon] - UBE - Université Bourgogne Europe)

  • Jimmy Lopez

    (UBE - Université Bourgogne Europe)

Abstract

We investigate both the innovation and labor market effects of network sector regulation in a consistent framework. The estimated impact of regulation on the innovation process is based on the Community Innovation Survey and a system of equations modelling the firm's choice of R&D expenditure, propensity to innovate, and performance. We then examine the regulation and innovation impact on the labor market using the European Union Labor Force Survey. From a sample of 330,604 firms and 8,594,055 individuals over the period 1998-2016 and five countries that have undergone important reforms (the Czech Republic, Hungary, Portugal, Slovakia and Spain), we find a strong negative effect of network regulation on firms' performance and individuals' employment probability. According to our estimates, the overall impact of the reforms implemented would be an average increase in the employment probability of 12.8%, almost entirely explained by an increase in firms' performance.

Suggested Citation

  • Océane Vernerey & Jimmy Lopez, 2026. "Regulation in the Network Sectors: Impact on the Innovation Process and the Employment Rate," Post-Print hal-05536453, HAL.
    • Handle: RePEc:hal:journl:hal-05536453
    DOI: 10.1057/s41294-025-00273-1
    Note: View the original document on HAL open archive server: https://hal.science/hal-05536453v1
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