Labor Laws and Innovation

Article, Preprint OPEN
Viral V. Acharya; Ramin P. Baghai; Krishnamurthy V. Subramanian;
  • Journal: The Journal of Law and Economics,volume 56,issue 4,pages997-997
  • Related identifiers: doi: 10.1086/674106
  • Subject: Entrepreneurship; Growth; Labor laws; Law and finance; R&D; Technological change
    • jel: jel:F30 | jel:J08 | jel:J8 | jel:J5 | jel:G31 | jel:K31

Can stringent labor laws be efficient? Possibly, if they provide firms with a commitment device to not punish short-run failures and thereby incentivize the pursuit of value-maximizing innovative activities. In this paper, we provide empirical evidence that strong labor... View more
  • References (59)
    59 references, page 1 of 6

    9Since there were no creditor rights changes in the ve sample countries from 1970 to 1978 (Armour et al. 2006),

    we extend the Djankov et al. (2007) index from 1978 to 1970.

    10Since these country-level law indices do not vary over time, we estimate their e ect by aggregating the country

    13Armingeon et al. (2008) construct a Comparative Political Data Set, which is a collection of annual political and

    institutional data for 23 democratic countries for the period of 1960 to 2006. Our variable Government is denoted

    \govparty" in Armingeon et al. (2008). [7] Armingeon, K., M. Gerber, P. Leimgruber, and M. Beyeler, 2008, \Comparative Political Data Set

    1960{2006, " Institute of Political Science, University of Berne. [8] Atanassov, J., and E. H. Kim, 2007, \Labor Laws and Corporate Governance: International Evidence

    from Restructuring Decisions," Working Paper, Ross School of Business. [9] Bassanini, A., L. Nunziata and D. Venn, 2009, \Job protection legislation and productivity growth in

    OECD countries, " Economic Policy 24(58), 351{402. [10] Bertrand, M. and S. Mullainathan, 2003, \Enjoying the Quiet Life? Corporate Governance and Man-

    agerial Preferences," Journal of Political Economy, 111, 1043{1075. [11] Besley, T. and R. Burgess, 2004, \Can Labor Regulation Hinder Economic Performance? Evidence

  • Metrics
Share - Bookmark