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Journal of Business Ethics
Published in: Journal of Business Ethics 2/2018

29-12-2016 | Original Paper

Employee Protection and Corporate Innovation: Empirical Evidence from China

Authors: Lijing Tong, Ningyue Liu, Min Zhang, Liming Wang

Published in: Journal of Business Ethics | Issue 2/2018

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Abstract

Through an analysis of survey data gathered from private firms in China, this study examines the impact of employee protection on corporate innovation ability. The results indicate that firms with more advanced employee protection have stronger innovation ability. Furthermore, the positive relationship between employee protection and corporate innovation ability is more pronounced in those enterprises with labor unions. Finally, a firm’s political connections strengthen the influence of employee protection on corporate innovation. These empirical findings highlight the positive consolidating effects of labor unions and political connections and will be of value to policy makers in emerging markets in gauging the important drivers of corporate innovation ability.
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Appendix
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Footnotes
1
Report of Economic and social development achievements from the 16th to 18th National Congress of the CPC, State Statistics Bureau, 2012: http://​www.​stats.​gov.​cn/​ztjc/​ztfx/​kxfzcjhh/​201208/​t20120817_​72839.​html.
 
2
The data are released by China's National Bureau of Statistics: http://​money.​163.​com/​12/​0817/​14/​8947EDAM00253B0H​.​html.
 
3
The survey was conducted by the Dagongzhe Migrant Worker Centre and the Hong Kong-based organization Worker Empowerment and involves 320 employees in Guangdong Province of China.
 
4
The survey was jointly conducted by the United Front Work Department of Communist Party of China Central Committee, All-China Federation of Industry & Commerce, State Administration for Industry and Commerce of the People’s Republic of China and Chinese Private Economy Research Association in 2004.
 
5
Zhejiang Economic Census Yearbook, China Statistics Press, 2004.
 
6
The survey only contains data of a firm’s self-developed products during the past 3 years, but we believe it’s reasonable to use the data since they can represent a firm’s innovation ability in recent years.
 
8
This measurement of employee protection will not limit the implications of our findings in a China-specific contest. First, in many developing countries, it is still common to see employees working for their employers without signing a work contract. For example, Human Development Report (2014) reports that nearly 80 percent of the global population lack comprehensive social protection and more than 1.5 billion workers around the world are in informal or precarious employment. Therefore, our study has direct implications for these undeveloped countries. Second, this study suggests that employee protection has an incremental effect on improving firm innovation no matter what form of protection a firm provides. Therefore, our study may also have implications for developed countries since there are many other ways for firms in developed countries to improve employee protection.
 
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Metadata
Title
Employee Protection and Corporate Innovation: Empirical Evidence from China
Authors
Lijing Tong
Ningyue Liu
Min Zhang
Liming Wang
Publication date
29-12-2016
Publisher
Springer Netherlands
Published in
Journal of Business Ethics / Issue 2/2018
Print ISSN: 0167-4544
Electronic ISSN: 1573-0697
DOI
https://doi.org/10.1007/s10551-016-3412-3

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