Employment protection legislation, multinational firms and innovation

Rachel Griffith and Gareth Macartney ()
Additional contact information
Gareth Macartney: Institute for Fiscal Studies and University College London

No W10/01, IFS Working Papers from Institute for Fiscal Studies

Abstract: The theoretical effects of labour regulations such as employment protection legislation (EPL) on innovation is ambiguous, and empirical evidence has thus far been inconclusive. EPL increases job security and the greater enforceability of job contracts may increase worker investment in innovative activity. On the other hand EPL increases adjustment costs faced by firms, and this may lead to under-investment in activities that are likely to require adjustment, including technologically advanced innovation. In this paper we find empirical evidence that both effects are at work - multinational enterprises locate more innovative activity in countries with high EPL, however they locate more technologically advanced innovation in countries with low EPL. This research is forthcoming in the Review of Economics and Statistics.

Keywords: Innovation; employment protection; multinational firm location (search for similar items in EconPapers)
JEL-codes: D21 F23 J24 O31 (search for similar items in EconPapers)
Date: 2010-01-04
New Economics Papers: this item is included in nep-ino, nep-reg and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.ifs.org.uk/wps/wp1001.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.ifs.org.uk/wps/wp1001.pdf [301 Moved Permanently]--> https://www.ifs.org.uk/wps/wp1001.pdf [302 Found]--> https://ifs.org.uk/wps/wp1001.pdf)

Related works:
Journal Article: Employment Protection Legislation, Multinational Firms, and Innovation (2014)
Working Paper: Employment Protection Legislation, Multinational Firms and Innovation (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ifs:ifsewp:10/01

Ordering information: This working paper can be ordered from
The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE

Access Statistics for this paper

More papers in IFS Working Papers from Institute for Fiscal Studies The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE. Contact information at EDIRC.
Bibliographic data for series maintained by Emma Hyman ().