Investment in network infrastructure is crucial for economic growth. This paper studies the impact of the presence of Independent Regulatory Agencies (IRAs) on the investment of European regulated firms. We account for measurement error in formal independence of IRAs by exploiting cross-country heterogeneity in the quality of political institutions. Results show that regulatory independence increases firms’ investment rate by around 1.2-3.3%. The positive effect survives when we control for social capital accumulation, investor protection and market liberalization. However, the effect of IRAs is not immune to politics, as we find that political interference in regulatory functions persists in EU and is detrimental to firm investment.
|Titolo:||Independent Agencies, Political Interference and Firm Investment. Evidence from the European Union|
|Data di pubblicazione:||2017|
|Appare nelle tipologie:||1.1 Articolo in rivista|
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|CR_28apr_2016_accepted.pdf||Articolo principale||2. Post-print||Non Pubblico - Accesso privato/ristretto||Administrator Richiedi una copia|
|Indep Regul and Investment_EI_2017.pdf||Articolo principale||2. Post-print||Non Pubblico - Accesso privato/ristretto||Administrator Richiedi una copia|