Employment Protection Legislation and Firm Growth: Evidence from a Natural Experiment

Anders Bornhal (), Sven-Olov Daunfeldt and Niklas Rudholm ()
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Anders Bornhal: HUI Research AB, SE-103 29 Stockholm, Sweden; Department of Economics, Dalarna University, SE-781 88 Borlange, Sweden
Niklas Rudholm: HUI Research AB, SE-103 29 Stockholm, Sweden; Department of Economics, Dalarna University, SE-781 88 Borlange, Sweden

SPRU Working Paper Series from SPRU - Science Policy Research Unit, University of Sussex Business School

Abstract: A natural experiment is used to identify the causal relationship be- tween employment protection legislation and Örm growth in Sweden. A reform of the last-in-Örst-out principle increased employment growth with over 4,000 additional jobs per year in Örms with less than eleven employees. Firms with ten employees became 3.4 percentage points less likely to increase their workforce, indicating that an introduced threshold kept them from growing. Thus, employment protection leg- islation seems to act as a growth barrier for small Örms.

Keywords: Firm growth; growth barriers; employment protection (search for similar items in EconPapers)
JEL-codes: D22 J23 K31 L25 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-bec and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Employment protection legislation and firm growth: evidence from a natural experiment (2017)
Working Paper: Employment Protection Legislation and Firm Growth: Evidence from a Natural Experiment (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:sru:ssewps:2015-17

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