Why Does Employment Legislation Not Damage Small Firms?

21 Pages Posted: 5 Jul 2004

See all articles by Paul K. Edwards

Paul K. Edwards

University of Warwick - Warwick Business School

Monder Ram

De Montfort University - School of Business; University of Birmingham - Birmingham Business School

John Black

University of Warwick

Abstract

Business rhetoric and conventional theory expect that employment regulations will have negative effects on small firms. Prior research has shown that effects are quite rare, but has not explained why. Case studies of 18 firms from three sectors identified four explanations. (1) Perceptions of effects tend to be broad and general, rather than reflections of concrete experience. (2) 'The law' is not uniform, with older laws being largely taken for granted. (3) Effects depend on competitive conditions, which are more important influences on firms than are regulations; where conditions are benign, regulations can be absorbed, but in other circumstances employment regulations can exacerbate competitive pressures. (4) A degree of informality in small firms further eases responses. By the same token, however, hopes that regulation will stimulate modernization are rarely realized.

Suggested Citation

Edwards, Paul K. and Ram, Monder and Black, John, Why Does Employment Legislation Not Damage Small Firms?. Journal of Law and Society, Vol. 31, No. 2, pp. 245-265, June 2004. Available at SSRN: https://ssrn.com/abstract=549786

Paul K. Edwards (Contact Author)

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

Monder Ram

De Montfort University - School of Business ( email )

Department of Corporate Strategy
Leicester LE1 9BH
United Kingdom
+44 116 255.1551 (Phone)
+44 116 251.7548 (Fax)

University of Birmingham - Birmingham Business School ( email )

Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom

John Black

University of Warwick

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

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