Government regulations, while often designed to protect consumers and workers, can sometimes act as hidden barriers to foreign competition—a phenomenon known as "regulation as protectionism." This creates a gap in understanding how different regulations impact the balance between domestic and foreign firms in various industries. Policymakers and businesses alike need clarity on whether regulations serve public interests or inadvertently stifle competition.

Understanding the Research Approach

One way to explore this issue would be to analyze how different types of regulations affect foreign firm participation across industries and countries. This could involve:

• Measuring regulatory intensity across areas like environmental standards, labor laws, and product safety.
• Collecting data on foreign firm presence in multiple markets.
• Using statistical methods to isolate the impact of regulations from other factors.

Existing datasets, such as OECD regulatory indicators, could be combined with new data on foreign firms to create a comprehensive analysis. The goal would be to identify which regulations have the strongest protectionist effects and whether these effects vary by industry or country development level.

Potential Applications and Stakeholders

Several groups could benefit from this research:

• Policymakers: Could use findings to design regulations that balance consumer protection with fair competition.
• Businesses: Might gain insights into navigating regulatory environments when expanding internationally.
• Consumer groups: Could assess whether regulations truly serve public interests or primarily protect domestic industries.

For execution, a phased approach might work best—starting with a focused study on one or two industries before scaling up. A simpler version could examine pharmaceuticals or automotive sectors across a few countries to test the methodology.

How This Differs From Existing Work

Unlike general regulatory indices, this approach would specifically measure how regulations affect foreign versus domestic firms. For example, while the World Bank's Doing Business indicators assess overall ease of doing business, this research would focus on the unique challenges foreign firms face due to regulatory differences.

By providing concrete evidence on how regulations shape market composition, this research could offer valuable insights for trade policy and international business strategy.