This looks great; will read the full paper now. I have long believed that we need more identity instilling sporting events to reinforce a sense of community.

The Cato Institute came to the same conclusion. open.substack.com/pub/alexnowr...

Fair enough & thank you.

I think it also explains why Europe's corporate landscape is more static. Of the top 100 firms in the world, only two EU firms were founded in the last 25 years. All other EU firms in that list were spin-offs from existing firms (e.g. Philipps -> ASML, Siemens -> Infineon). /end

This gives non-EU firms a leg-up in competition and once the regulation is in place and barriers to entry are higher, reduces the likelihood of success of EU firms. While a lot of EU regulation (e.g. DMA, P2B, DSA) is concerned with promoting fair competition, we end up with the opposite result. 7/x

But I am sceptical that most EU regulation achieves net-positive outcomes for EU firms. EU firms have a harder time scaling. If the EU is a regulatory frontrunner in a particular area, this adds to the cost of scaling. Firms outside the EU can scale without incurring these costs. 6/x

This is not to say that regulation can never be beneficial. For example, Rösner et al show that the harmonization of the UCPD has increased cross-border commerce in Europe and therefore likely increased competition, benefitting consumers. 5/x
papers.ssrn.com/sol3/papers....

The negative impact of regulation on innovation & competition has also been shown on a more granular level. For example, Janßen et al show this for GDPR and the development of new apps. A number of papers have also shown that GDPR has mostly benefitted Meta & Co.
www.nber.org/system/files... 4/x

It also holds true for changes in regulation (as opposed to the cumulative effect of regulation). Marc Eskildsen shows that US companies in a given sector realize outsize returns in the years following an increase in regulation compared to those that experience a deregulation. 3/x

Generally, sectors that are more regulated have higher barriers to entry, less competition, and higher economic rents. James Bessen has a paper that shows the cumulative impact of regulation for the US. It's massive (see below). 2/x papers.ssrn.com/sol3/papers....

Yes, I have read it and was underwhelmed by the book (for lack of empirical evidence). My hypothesis is that it's actually all of the both (regulation AND market fragmentation, access to finance, etc) with regulation compounding the other factors. 1/x