Wrongful Discharge Laws and Innovation

• 成果类型: Article
• 署名作者: Acharya, Viral V.; Baghai, Ramin P.; Subramanian, Krishnamurthy V.
• 署名单位: Center for Economic & Policy Research (CEPR); National Bureau of Economic Research; Stockholm School of Economics; Indian School of Business (ISB)
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hht009
• 发表日期: 2014
• 页码: 301
• 关键词: job security; EMPLOYMENT; COSTS; governance; GROWTH; RIGHTS; POLICY; WILL

摘要

We show that wrongful discharge laws-laws that protect employees against unjust dismissal-spur innovation and new firm creation. Wrongful discharge laws, particularly those that prohibit employers from acting in bad faith ex post, limit employers' ability to hold up innovating employees after the innovation is successful. By reducing the possibility of holdup, these laws enhance employees'innovative efforts and encourage firms to invest in risky but potentially mould-breaking projects. We develop a model and provide supporting empirical evidence of this effect using the staggered adoption of wrongful discharge laws across U.S. states.