Work

Labor Regulations and European Venture Capital

Year: 2014

Type: article

Abstract: European nations substitute between employment protection regulations and labor market expenditures (e.g., unemployment insurance benefits) for providing worker insurance. Employment regulations more directly tax firms making frequent labor adjustments than other labor market insurance mechanisms. Venture capital investors are especially sensitive to these labor adjustment costs. Nations favoring labor market expenditures as the mechanism for providing worker insurance developed stronger venture capital markets over 1990-2008, especially in high volatility sectors. In this context, policy mechanisms are more important than the overall level of worker insurance.

Source: Journal of Economics & Management Strategy

DOI: 10.1111/jems.12077

Authors: Ant Bozkaya, William R. Kerr

Institutions: Massachusetts Institute of Technology, Harvard University, Bank of Finland

Language: English

Topic: Private Equity and Venture Capital

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

Funders: National Science Foundation, Harvard Business School