Restrictive regulations spark innovation, leading to disruptive new technologies.
The article explores how strict rules can either limit or boost innovation in companies. Some say strict rules limit innovation by restricting options, while others argue they push companies to find new ways to innovate. The researchers studied federal regulations and patents from over 1,200 firms to see how strict rules affect innovation. They found that strict rules can either help or hinder innovation, depending on how uncertain the rules are and the type of innovation being considered.