@article{Belloc:232210,
      recid = {232210},
      author = {Belloc, Filippo},
      title = {Employee Representation Legislations and Innovation},
      address = {2016-02-01},
      number = {843-2016-55949},
      series = {ET},
      pages = {49},
      month = {Feb},
      year = {2016},
      abstract = {We analyse how countries' innovation outcomes are affected  by national legislations of worker participation to  corporate governance. We develop a model of employee  representation laws (ERL) and innovation in the presence of  incomplete labour contracts and predict heterogeneous ERL  effects across different systems of dismissal regulation.  We then perform a panel regression analysis, exploiting  2-digit panel data for 21 manufacturing sectors of USA, UK,  India, France and Germany, over the 1977-2005 period. We  find that ERL effects on aggregate innovation output are  positive, statistically significant and higher in magnitude  where national labour laws impose significant firing costs  to the firm with respect to institutional settings in which  firing costs are low or absent. These results are robust to  possible technology selection dynamics, endogeneity and  institutional changes in the legal system of patent  protection. We also estimate ERL effects on innovation  conditional on firing costs at an industry level and show  that the impact of ERL is relatively larger in  those
sectors where the human capital contribution to  production is higher. Our results have relevant  implications for the optimal design of employee  representation legislations.},
      url = {http://ageconsearch.umn.edu/record/232210},
      doi = {https://doi.org/10.22004/ag.econ.232210},
}