The Employment Protection and Innovation Activity of Enterprises

Student: Kuksov Vladimir

Educational Programme: Applied Economics (Master)

Year of Graduation: 2021

In this study, impact of employment protection on innovation is considered. Perceived rigidity of hiring and firing laws, share of employees on fixed-term contracts and share of employees in trade unions were taken as indicators of the employment protection. Innovation implementation was divided into categories of product, technological, marketing and organizational innovations. The share of employees in trade unions and perceived strictness of laws increase probability of implementing innovation. Connection between the share of employees on fixed-term contracts and probability of innovations appears to be of a reverse U-shape. Nevertheless, impact on product innovation differs. In this case, the share of employees on fixed-term contracts increase the probability, while we find weak evidence that perceived rigidity of hiring and firing laws decreases the probability of product innovation.

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