A large number of studies have shown that contribution of exporters to economic growth and development is much higher than non-exporting firms. This evidence has lead governments to improve their trade policies in order to increase foreign exposure of firms. However, improvements in trade...

We examine the impact of employment protection legislation (EPL) on individual firms' growth opportunities, as measured by Tobin's q. On the one hand, by increasing job security, EPL spurs innovation effort. Yet that boost only occurs in firms with little comparative advantage at original...