Contributions

  • Baghai-Wadji, Ramin - Contributor
  • Subramanian, Krishnamurthy - Contributor
  • National Bureau of Economic Research - Contributor

Publication

2010 - National Bureau of Economic Research, Cambridge, MA, Massachusetts

Language

English

Word Count

0 words, Guess

Page Count

0 pages

Physical Format

Electronic resource

Identifiers

Classifications

  • LCCHB1

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.

Subjects

Series Statement

  • NBER working paper series -- working paper 16484
  • Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16484.

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