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Employment Protection and Innovation Intensity. ESRI WP445. December 2012

Murphy, Gavin and Siedschlag, Iulia and McQuinn, John (2012) Employment Protection and Innovation Intensity. ESRI WP445. December 2012. [Working Paper]

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    Abstract

    We examine the impact of the strictness of employment protection legislation on innovation intensity. To this purpose, we use a panel of annual data from OECD countries over the period 1990-1999 and estimate difference-in-difference models to explain the variation of innovation intensity between industries within countries. Our estimates indicate that stricter employment protection legislation led to significantly lower innovation intensity in industries with higher job reallocation rates or higher layoff propensities. Further, we find that the strictness of employment regulations on the use of temporary contracts had a stronger impact on innovation intensity than the strictness of employment protection for regular contracts. Our findings are robust to additional industry covariates and to other labour market institutions that may affect innovation performance and industry job reallocation propensity. In addition, our sensitivity analysis indicates that our results are not driven by the particular measures of employment protection legislation and industry layoff propensity that we use or by any country in our sample.

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    Item Type: Working Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > employment/labour market
    EU policies and themes > Policies & related activities > innovation policy
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Economic and Social Research Institute (ESRI), Dublin > ESRI Working Papers
    Depositing User: Alyssa McDonald
    Official EU Document: No
    Language: English
    Date Deposited: 11 Jul 2017 16:54
    Number of Pages: 43
    Last Modified: 11 Jul 2017 16:54
    URI: http://aei.pitt.edu/id/eprint/88035

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