Political situation, legal and labour regulatory regimes and employment creation by firms in emerging economies

Nicholas Addai Boamah, Francis Ofori-Yeboah and Kwadjo Appiagyei

Asian Journal of Economics and Banking, 2025, vol. 9, issue 3, 510-527

Abstract: PurposeThis study investigates the legal system, labour regulations and political uncertainty effects on employment creation in emerging economies (EE). Also, size, export focus, ownership and sector influences on employment creation are explored.Design/methodology/approachThe study utilized the generalised methods of moments estimator, relying on data from 69 emerging economies. A Bayesian estimation technique is adopted to robustly check the GMM results.FindingsEvidence shows that concerns about political instability, the court system and labour regulations constrain employment creation. The study finds significant firm size, export orientation and sector effects and an insignificant ownership effect on employment creation.Practical implicationsThe findings show that employment creation policies should improve the court system and instil firms’ confidence in the legal regime, ensuring political stability and a favourable labour regulatory regime. Also, policy must not emphasise foreign firms over domestic firms, as they impact employment creation equally.Originality/valueThe study applies GMM and Bayesian estimation techniques to evaluate employment creation and provides both theoretical and practical insights. The evidence provides insights for policymakers to enhance employment creation. The study’s evidence supports the rational decision and real options theories and extends the employment creation literature.

Keywords: Emerging economies; Employment creation; Court systems; Labour regulation; Labour productivity; Investments (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/ajeb/article/9/3/510/12484 ... nd-labour-regulatory (text/html)
https://www.emerald.com/ajeb/article-pdf/9/3/510/1 ... b-03-2024-0032en.pdf (application/pdf)

Related works:
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:eme:ajebpp:ajeb-03-2024-0032

DOI: 10.1108/AJEB-03-2024-0032

Access Statistics for this article

Asian Journal of Economics and Banking is currently edited by Dr. Nguyen Ngoc Thach

More articles in Asian Journal of Economics and Banking from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().