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REGULATORY RED TAPE AND PRIVATE FIRM PERFORMANCE
Author(s) -
DE JONG GJALT,
VAN WITTELOOSTUIJN ARJEN
Publication year - 2015
Publication title -
public administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.313
H-Index - 93
eISSN - 1467-9299
pISSN - 0033-3298
DOI - 10.1111/padm.12098
Subject(s) - harm , competition (biology) , phenomenon , business , industrial organization , limit (mathematics) , power (physics) , economics , adaptation (eye) , market economy , public economics , law , political science , ecology , mathematical analysis , physics , mathematics , optics , quantum mechanics , biology
Regulation may obstruct dynamic adaptation, innovative power, and entrepreneurial activity. On the other hand, regulation could be interpreted as a phenomenon which society just has to learn to live with, and which otherwise does no real economic harm. This article explores both of these hypotheses. We study the impact of three dimensions of regulatory red tape on the performance of private companies: regulation cost, regulation change, and regulation inconsistency. We analyse unique survey data from 530 Dutch private companies. The results show that regulation cost, inconsistency, and change limit sales turnover growth, and that regulation change hampers market competition performance.