García-Vega, María; Kneller, Richard; Stiebale, Joel - 2020
We analyze the effect of a labor market reform on firms' product innovation. The re- form, which amounts to a natural … uncertainty. Using a difference-in- differences framework, we show that the reform increased product innovations. We also provide … evidence that the reform induced upgrading of product quality and enabled firms to grow faster and enter new markets. The …
