Labor Regulations and European Venture Capital

35 Pages Posted: 25 Oct 2014

See all articles by Ant Bozkaya

Ant Bozkaya

Harvard Business School; MIT Sloan School Global Economics & Management Group; NBER Innovation Policy and the Economy Group

William Kerr

Harvard University - Entrepreneurial Management Unit

Date Written: Winter 2014

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 (VC) investors are especially sensitive to these labor adjustment costs. Nations favoring labor market expenditures as the mechanism for providing worker insurance developed stronger VC markets over 1990–2008, especially in high‐volatility sectors. In this context, policy mechanisms are more important than the overall level of worker insurance.

Suggested Citation

Bozkaya, Ant and Kerr, William R., Labor Regulations and European Venture Capital (Winter 2014). Journal of Economics & Management Strategy, Vol. 23, Issue 4, pp. 776-810, 2014. Available at SSRN: https://ssrn.com/abstract=2514919 or http://dx.doi.org/10.1111/jems.12077

Ant Bozkaya (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

MIT Sloan School Global Economics & Management Group ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

HOME PAGE: http://www.bozkaya.org

NBER Innovation Policy and the Economy Group ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://www.bozkaya.org

William R. Kerr

Harvard University - Entrepreneurial Management Unit ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
0
Abstract Views
296
PlumX Metrics