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Employee Protection and Corporate Innovation: Empirical Evidence from China

Lijing Tong (), Ningyue Liu (), Min Zhang () and Liming Wang ()
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Lijing Tong: Renmin University of China
Ningyue Liu: Beijing Institute of Technology
Min Zhang: Renmin University of China
Liming Wang: Beijing University of Technology

Journal of Business Ethics, 2018, vol. 153, issue 2, 569-589

Abstract: Abstract Through an analysis of survey data gathered from private firms in China, this study examines the impact of employee protection on corporate innovation ability. The results indicate that firms with more advanced employee protection have stronger innovation ability. Furthermore, the positive relationship between employee protection and corporate innovation ability is more pronounced in those enterprises with labor unions. Finally, a firm’s political connections strengthen the influence of employee protection on corporate innovation. These empirical findings highlight the positive consolidating effects of labor unions and political connections and will be of value to policy makers in emerging markets in gauging the important drivers of corporate innovation ability.

Keywords: Corporate innovation; Employee protection; Labor union; Political connections (search for similar items in EconPapers)
Date: 2018
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