Shielding firm value: Employment protection and process innovation

• 成果类型: Article
• 署名作者: Bena, Jan; Ortiz-Molina, Hernan; Simintzi, Elena
• 署名单位: University of British Columbia; University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.10.005
• 发表日期: 2022
• 页码: 637-664
• 关键词: process innovation; employment protection; Operating leverage

摘要

Following state-level legal changes that increase labor dismissal costs, firms increase their innovation in new processes that facilitate the adoption of cost-saving production meth-ods, especially in industries with a large share of labor costs in total costs. Firms with high innovation ability exhibit larger increases in process innovation and capital-labor ra-tios, an effect driven by both increases in capital investment and decreases in employment. By facilitating the adjustment of the input mix when conditions in input markets change, innovation ability allows firms to mitigate value losses and is a key driver of their perfor-mance. (c) 2021 Elsevier B.V. All rights reserved.