We examine the impact of the strictness of employment protection legislation on innovation intensity. To this purpose, we use a panel of annual data from OECD countries over the period 1990-1999 and estimate difference-in-difference models to explain the variation of innovation intensity between...

We study the effects of employment protection taking into account that firms can invest in R&D or buy new technologies in order to restore their productivity. To do so we develop an equilibrium matching model with an imperfect labor and innovation market. If employment protection is introduced,...