EMPLOYMENT PROTECTION LEGISLATION, CAPITAL INVESTMENT AND ACCESS TO CREDIT: EVIDENCE FROM ITALY

• 成果类型: Article
• 署名作者: Cingano, Federico; Leonardi, Marco; Messina, Julian; Pica, Giovanni
• 署名单位: University of Salerno; University of Milan
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12212
• 发表日期: 2016
• 页码: 1798-1822
• 关键词: market imperfections; Tax incentives; firing costs; Job flows; LABOR; WORKER; PRODUCTIVITY; institutions; search; panel

摘要

This article estimates the causal impact of dismissal costs on capital deepening and productivity, exploiting a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees, leaving firing costs unchanged for larger firms. We show that the rise in firing costs induced an increase in the capital-labour ratio and a decline in total factor productivity in small firms relative to larger firms. Our results indicate that capital deepening was more pronounced at the low-end of the capital distribution - where the reform hit arguably harder - and among firms endowed with a larger amount of liquid resources. We also find that stricter Employment Protection Legislation (EPL) raised the share of high-tenure workers, which suggests a complementarity between firm-specific human capital and physical capital in moderate EPL environments.