Acharya, V V and Baghai, R and Subramanian, K
(2010)
Labor Laws and Innovation.
Working Paper.
National Bureau of Economic Research.
(Unpublished)
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Abstract
Stringent labor laws can provide firms a commitment device to not punish short-run failures and thereby spur their employees to pursue value-enhancing innovative activities. Using patents and citations as proxies for innovation, we identify this effect by exploiting the time-series variation generated by staggered country-level changes in dismissal laws. We find that within a country, innovation and economic growth are fostered by stringent laws governing dismissal of employees, especially in the more innovation-intensive sectors. Firm-level tests within the United States that exploit a discontinuity generated by the passage of the federal Worker Adjustment and Retraining Notification Act confirm the cross-country evidence.
| Affiliation: |
Indian School of Business
|
| ISB Creators: |
| ISB Creators | ORCiD |
|---|
| Subramanian, K | UNSPECIFIED |
|
| Item Type: |
Monograph
(Working Paper)
|
| Uncontrolled Keywords: |
Employment termination, Labor law, Business innovation, Patents, Citation indexes, Case dismissal, Law firms, Gross domestic product, Rule of law |
| Subjects: |
Finance |
| Depositing User: |
Ilayaraja M
|
| Date Deposited: |
08 Jun 2019 20:04 |
| Last Modified: |
09 Jun 2019 19:17 |
| URI: |
http://eprints.exchange.isb.edu/id/eprint/1050 |
| Publisher URL: |
https://www.nber.org/papers/w16484 |
| Related URLs: |
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