The effects of government labour intervention on firm performance and innovation

Kyungmyung Jang, Horim Kim and Martin Kang

Applied Economics, 2024, vol. 56, issue 60, 9333-9338

Abstract: The government sets legal limits on the number of working hours to minimize the negative effects of long working hours. Reducing legal working hours increases employee life satisfaction by decreasing mental and physical health problems. However, reducing legal working hours may decrease the firm’s future investment opportunities, which reduces the firm’s competitiveness. This study uses a quasi-experimental design to explore the negative effects of reducing legal working hours on firms. Specifically, we build a difference-in-differences (DID) model to explore the negative effects of reducing legal working hours on a firm’s ROI and innovation. We find reducing legal working hours decreases a firm’s ROI and innovation.

Date: 2024
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DOI: 10.1080/00036846.2024.2302328

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