Labor laws and innovation
By: Viral V. Acharya, Ramin P. Baghai, Krishnamurthy V. Subramanian
Contributors: Baghai-Wadji, Ramin; Subramanian, Krishnamurthy; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16484; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16484.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "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"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 1/6/2011.

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