Employee Protection and Corporate Innovation: Empirical Evidence from China

Lijing Tong, Ningyue Liu, Min Zhang, Liming Wang

Journal of Business Ethics · 2018 · Volume 153 · Issue 2

Abstract

Through an analysis of survey data gathered from private firms in China, this study examines the impact of employee protection on corporate innovation ability. The results indicate that firms with more advanced employee protection have stronger innovation ability. Furthermore, the positive relationship between employee protection and corporate innovation ability is more pronounced in those enterprises with labor unions. Finally, a firm’s political connections strengthen the influence of employee protection on corporate innovation. These empirical findings highlight the positive consolidating effects of labor unions and political connections and will be of value to policy makers in emerging markets in gauging the important drivers of corporate innovation ability.

Keywords

Corporate innovation, Employee protection, Labor union, Political connections

Enable JavaScript for citation tools and additional paper interactions.