Skip to main content

Advertisement

SpringerLink
Log in

Employee Protection and Corporate Innovation: Empirical Evidence from China

  • Original Paper
  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

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.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  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.

  7. China's National Bureau of Statistics: http://money.163.com/12/0817/14/8947EDAM00253B0H.html.

  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.

References

  • Acemoglu, D., & Akcigit, U. (2012). Intellectual property rights policy, competition and innovation. Journal of the European Economic Association, 10(1), 1–42.

    Google Scholar 

  • Acemoglu, D., & Pischke, J. S. (1999). Beyond Becker: Training in imperfect labour markets. The Economic Journal, 109(453), 112–142.

    Google Scholar 

  • Adhikari, A., Derashid, C., & Zhang, H. (2006). Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia. Journal of Accounting and Public Policy, 25(5), 574–595.

    Google Scholar 

  • Ahn, S. (2002). Competition, innovation and productivity growth: A review of theory and evidence. Working paper.

  • Alpert, W. (1982). Unions and private wage supplements. Journal of Labor Research, 3(3), 179–180.

    Google Scholar 

  • Ambec, S., Cohen, M. A., Elgie, S., & Lanoie, P. (2013). The Porter hypothesis at 20: Can environmental regulation enhance innovation and competitiveness? Review of Environmental Economics and Policy, 7(1): 2–22.

    Google Scholar 

  • Andries, P., & Czarnitzki, D. (2014). Small firm innovation performance and employee involvement. Small Business Economics, 43(1), 21–38.

    Google Scholar 

  • Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2012). Firm innovation in emerging markets: The role of finance, governance, and competition. Journal of Financial and Quantitative Analysis, 46(06), 1545–1580.

    Google Scholar 

  • Bae, K. H., Kang, J. K., & Wang, J. (2011). Employee treatment and firm leverage: A test of the stakeholder theory of capital structure. Journal of Financial Economics, 100(1), 130–153.

    Google Scholar 

  • Balain, S., & Sparrow, P. (2009). Engaged to perform, CPHR white paper. Lancaster Management School.

  • Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 771–792.

    Google Scholar 

  • Becker, W., & Dietz, J. (2004). R&D cooperation and innovation activities of firms—evidence for the German manufacturing industry. Research Policy, 33(2), 209–223.

    Google Scholar 

  • Bertschek, I., & Entorf, H. (1996). On nonparametric estimation of the Schumpeterian link between innovation and firm size: evidence from Belgium. France, and Germany, Empirical Economics, 21, 401–426.

    Google Scholar 

  • Bishop, P., & Wiseman, N. (1999). External ownership and innovation in the United Kingdom. Applied Economics, 31, 443–450.

    Google Scholar 

  • Bititci, U. S., Ackermann, F., Ates, A., Davies, J., Garengo, P., Gibb, S., et al. (2011). Managerial processes: Business process that sustain performance. International Journal of Operations & Production Management, 31(8), 851–891.

    Google Scholar 

  • Blair, Douglas H., & Crawford, David L. (1984). Labor union objectives and collective bargaining. Quarterly Journal of Economics, 99, 547–566.

    Google Scholar 

  • Blanchard, O., & Landier, A. (2002). The perverse effects of partial labour market reform: Fixed-term contracts in France. The Economic Journal, 112(480), 214–244.

    Google Scholar 

  • Blundell, R., Griffith, R., & Van Reenen, J. (1999). Market share, market value and innovation in a panel of British manufacturing firms. The Review of Economic Studies, 66(3), 529–554.

    Google Scholar 

  • Booth, A. L., Francesconi, M., & Frank, J. (2002). Temporary jobs: Stepping stones or dead ends? The Economic Journal, 112(480), 189–213.

    Google Scholar 

  • Bradley, D., Kim, I., & Tian, X. (2013). The causal effect of labor unions on innovation. Working paper.

  • Branco, M. C., & Rodrigues, L. L. (2006). Corporate social responsibility and resource-based perspectives. Journal of Business Ethics, 69, 111–132.

    Google Scholar 

  • Bratti, M., & Felice, G. (2012). Are exporters more likely to intro duce product innovations? The World Economy, 35(11), 1559–1598.

    Google Scholar 

  • Brouwer, E., & Kleinknecht, A. (1997). Measuring the unmeasurable: A country’s non-R&D expenditure on product and service innovation. Research Policy, 25(8), 1235–1242.

    Google Scholar 

  • Cahuc, P., & Postel-Vinay, F. (2002). Temporary jobs, employment protection and labor market performance. Labour Economics, 9(1), 63–91.

    Google Scholar 

  • Caird, S. (1994). How important is the innovator for the commercial success of innovative products in SMEs? Technovation, 14(2), 71–83.

    Google Scholar 

  • Castanias, R. P., & Helfat, C. E. (2001). The managerial rents model, theory and empirical analysis. Journal of Management, 27, 661–678.

    Google Scholar 

  • Choi, J. J., Li, Y., Mao, C. X., & Zhang, J. (2014). Employee treatment and corporate fraud. Working paper.

  • Claessens, S., Feijen, E., & Laeven, L. (2008). Political connections and preferential access to finance: The role of campaign contributions. Journal of Financial Economics, 88, 554–580.

    Google Scholar 

  • Clarkson, M. E. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management Review, 20(1), 92–117.

    Google Scholar 

  • Connolly, R. A., & Hirschey, M. (1984). R&D, market structure and profits, a value based approach. The Review of Economics and Statistics, 66(4), 682–686.

    Google Scholar 

  • Cooke, P., Urange, M. G., & Extebarria, E. (1997). Regional innovation systems: Institutional and organizational dimensions. Research Policy, 4(5), 475–493.

    Google Scholar 

  • Cornaggia, J., Mao, Y., Tian, X., & Wolfe, B. (2015). Does banking competition affect innovation? Journal of Financial Economics, 115(1), 189–209.

    Google Scholar 

  • Cotton, J. L., Vollrath, D. A., Froggatt, K. L., Lengnick-Hall, M. L., & Jennings, K. R. (1988). Employee participation: Diverse forms and different outcomes. Academy of Management Review, 13(1), 8–22.

    Google Scholar 

  • Craighead, C. W., Hult, G. T. M., & Ketchen, D. J. (2009). The effects of innovation–cost strategy, knowledge, and action in the supply chain on firm performance. Journal of Operations Management, 27(5), 405–421.

    Google Scholar 

  • Crook, T. R., Ketchen, D. J., Combs, J. G., & Todd, S. (2008). Strategic resources and performance: A meta-analysis. Strategic Management Journal, 29, 1141–1154.

    Google Scholar 

  • Cui, A. S., & O’Connor, G. (2012). Alliance portfolio resource diversity and firm innovation. Journal of Marketing, 76(4), 24–43.

    Google Scholar 

  • Damanpour, F. (1992). Organizational size and innovation. Organization Studies, 13(3), 375–402.

    Google Scholar 

  • De la Fuente, A., & Marin, J. (1996). Innovation, bank monitoring, and endogenous financial development. Journal of Monetary Economics, 38(2), 269–301.

    Google Scholar 

  • Dewatripont, M., & Maskin, E. (1995). Credit and efficiency in centralized and decentralized economies. The Review of Economic Studies, 62(4), 541–555.

    Google Scholar 

  • Du, S., Bhattacharya, C. B., & Sen, S. (2010). Maximizing business returns to corporate social responsibility (CSR): The role of CSR communication. International Journal of Management Reviews, 12(1), 8–19.

    Google Scholar 

  • Eisenhardt, K. M., & Tabrizi, B. N. (1995). Accelerating adaptive processes: Product innovation in the global computer industry. Administrative Science Quarterly, 40(1), 84–110.

    Google Scholar 

  • Engel, P. G., & Salomon, M. L. (1997). Facilitating innovation for development: A RAAKS resource box. Koninklijk Instituutvoor de Tropen (KIT) (Royal Tropical Institute, RTI).

  • Farber, S. (1981). Buyer market structure and R&D effort: A simultaneous equations model. The Review of Economics and Statistics, 63(3), 336–345.

    Google Scholar 

  • Freel, M. S. (2003). Sectoral patterns of small firm innovation, networking and proximity. Research Policy, 32, 751–770.

    Google Scholar 

  • Freeman, R. B., & Medoff, J. L. (1984). What do unions do?. New York: Basic Books.

    Google Scholar 

  • Galasso, A., & Simcoe, T. S. (2011). CEO overconfidence and innovation. Management Science, 57(8), 1469–1484.

    Google Scholar 

  • Galbraith, J. K. (1952). The concept of countervailing power. American Capitalism, Boston: Houghton Mifflin.

    Google Scholar 

  • Galende, J., & De la Fuente, J. M. (2003). Internal factors determining a firm’s innovative behavior. Research Policy, 32, 715–736.

    Google Scholar 

  • Galia, F., & Legros, D. (2004). Complementarities between obstacles to innovation: Evidence from France. Research Policy, 33, 1185–1199.

    Google Scholar 

  • Giuliodori, D., & Stucchi, R. (2012). Innovation and job creation in a dual labor market: Evidence from Spain. Economics of Innovation and New Technology, 21(8), 801–813.

    Google Scholar 

  • Glenn Richey, R., Jr., Tokman, M., Wright, R. E., & Harvey, M. G. (2005). Monitoring reverse logistics programs: A roadmap to sustainable development in emerging markets. Multinational Business Review, 13(3), 41–65.

    Google Scholar 

  • Godfrey, P. C. (2005). The relationship between corporate philanthropy and shareholder wealth: A risk management perspective. Academy of Management Review, 30(4), 777–798.

    Google Scholar 

  • Gorodnichenko, Y., & Schnitzer, M. (2013). Financial constraints and innovation: Why poor countries don’t catch up. Journal of the European Economic Association, 11(5), 1115–1152.

    Google Scholar 

  • Goyder, M. (2003). Redefining CSR: From the rhetoric of accountability to the reality of earning trust. London: Tomorrow’s Company.

    Google Scholar 

  • Grabowski, H. G. (1968). The determinants of industrial research and development: A study of the chemical, drug, and petroleum industries. Journal of Political Economy, 76, 292–306.

    Google Scholar 

  • Greve, H. R. (2003). A behavioral theory of R&D expenditures and innovations: Evidence from shipbuilding. Academy of Management Journal, 46, 685–702.

    Google Scholar 

  • Gronum, S., Verreynne, M. L., & Kastelle, T. (2012). The role of networks in small and medium-sized enterprise innovation and firm performance. Journal of Small Business Management, 50(2), 257–282.

    Google Scholar 

  • Hill, C. W. L., & Snell, S. A. (1988). External control, corporate strategy, and firm performance in research-intensive industries. Strategic Management Journal, 9, 577–590.

    Google Scholar 

  • Hitt, M. A., Biermant, L., Shimizu, K., & Kochhar, R. (2001). Direct and moderating effects of human capital on strategy and performance in professional service firms: A resource-based perspective. Academy of Management Journal, 44(1), 13–28.

    Google Scholar 

  • Holman, D., Totterdell, P., Axtell, C., Stride, C., Port, R., Svensson, R., et al. (2012). Job design and the employee innovation process: The mediating role of learning strategies. Journal of Business and Psychology, 27(2), 177–191.

    Google Scholar 

  • Holmstrom, B. (1989). Agency costs and innovation. Journal of Economic Behavior & Organization, 12, 305–327.

    Google Scholar 

  • Huang, H., & Xu, C. (1999). Institutions, innovations, and growth. American Economic Review, 89(2), 438–444.

    Google Scholar 

  • Hult, G. T. M., Ketchen, D. J., & Arrfelt, M. (2007). Strategic supply chain management: Improving performance through a culture of competitiveness and knowledge development. Strategic Management Journal, 28(10), 1035–1052.

    Google Scholar 

  • Jimenez-Jimenez, D., & Sanz-Valle, R. (2005). Innovation and human resource management fit: An empirical study. International journal of Manpower, 26(4), 364–381.

    Google Scholar 

  • Kahn, L. M. (2007). The impact of employment protection mandates on demographic temporary employment patterns: International microeconomic evidence. The Economic Journal, 117(521), F333–F356.

    Google Scholar 

  • Kirbach, M., & Schmiedebe, C. (2008). Innovation and export performance: Adjustment and remaining differences in east and west German Manufacturing. Economics of Innovation and New Technology, 17(5), 435–457.

    Google Scholar 

  • Koeller, C. T. (1995). Innovation, market structure and firm size: A simultaneous equations model. Managerial and Decision Economics, 16(3), 259–269.

    Google Scholar 

  • Koeller, C. T. (1996). Union membership, market structure, and the innovation output of large and small firms. Journal of Labor Research, 17(4), 683–699.

    Google Scholar 

  • Landry, R., Amara, N., & Lamari, M. (2002). Does social capital determine innovation? To what extent? Technological Forecasting and Social Change, 69, 681–701.

    Google Scholar 

  • Leuz, C., & Oberholzer-Gee, F. (2006). Political relationships, global financing, and corporate transparency. Journal of Financial Economics, 81(2), 411–439.

    Google Scholar 

  • Levin, R. C., & Reiss, P. C. (1984). Tests of a schumpeterian model of R&D and market structure. In Z. Griliches (Eds.), R&D, patents and productivity. Chicago: University of Chicago Press for the National Bureau of Economic Research.

    Google Scholar 

  • Lewis, S. (2003). Reputation and corporate responsibility. Journal of Communication Management, 7(4), 356–366.

    Google Scholar 

  • Li, H., Meng, L., Wang, Q., & Zhou, L. A. (2008). Political connections, financing and firm performance: Evidence from Chinese private firms. Journal of Development Economics, 87, 283–299.

    Google Scholar 

  • Lin, H. F. (2007). Effects of extrinsic and intrinsic motivation on employee knowledge sharing intentions. Journal of Information Science, 33(2), 135–149.

    Google Scholar 

  • Ludwig, T. D., & Frazier, C. B. (2012). Employee engagement and organizational behavior management. Journal of Organizational Behavior Management, 32(1), 75–82.

    Google Scholar 

  • MacPherson, A. D. (1998). Academic-industry linkages and small firm innovation: Evidence from the scientific instruments sector. Entrepreneurship and Regional Development, 10(4), 261–276.

    Google Scholar 

  • Madrid-Guijarro, A., Garcia, D., & Van Auken, H. (2009). Barriers to innovation among Spanish manufacturing SMEs. Journal of Small Business Management, 47(4), 465–488.

    Google Scholar 

  • Mairesse, J., & Sassenou, M. (1991). R&D and productivity: A survey of econometric studies at the firm level. The Science Technology and Industry Review, 8, 317–348.

    Google Scholar 

  • Majumdar, S. K. (1995). The determinants of investment in new technology: An examination of alternative hypotheses. Technological Forecasting and Social Change, 50, 153–165.

    Google Scholar 

  • Makri, M., Lane, P. J., & Gomez-Mejia, L. R. (2006). CEO incentives, innovation, and performance in technology-intensive firms: A reconciliation of outcome and behavior-based incentive schemes. Strategic Management Journal, 27(11), 1057–1080.

    Google Scholar 

  • Manyika, J., Chui, M., Brown, B., Bughin, J., Dobbs, R., Roxburgh, C. & McKinsey Global Institute. (2011). Big data: The next frontier for innovation, competition, and productivity. McKinsey Global Institute, May.

  • Melancon, Y., & Doloreux, D. (2013). Developing a knowledge infrastructure to foster regional innovation in the periphery: A study from Quebec’s coastal region in Canada. Regional Studies, 47(9), 1555–1572.

    Google Scholar 

  • Miller, D., & Shamsie, J. (1996). The resource-based view of the firm in two environments: The Hollywood Film Studios from 1936 to 1965. Academy of Management Journal, 39, 519–543.

    Google Scholar 

  • Moir, L. (2001). What do we mean by corporate social responsibility? Corporate Governance, 1(2), 16–22.

    Google Scholar 

  • Morsing, M., & Schultz, M. (2006). Corporate social responsibility communication: stakeholder information, response and involvement strategies. Business Ethics: A European Review, 15(4), 323–338.

    Google Scholar 

  • Naor, M., Jones, J. S., Bernardes, E. S., Goldstein, S. M., & Schroeder, R. (2014). The culture-effectiveness link in a manufacturing context: A resource-based perspective. Journal of World Business, 49(3), 321–331.

    Google Scholar 

  • Nickell, S. (1997). Unemployment and labor market rigidities: European versus North America. American Economic Association, 11(3), 55–74.

    Google Scholar 

  • Onetti, A., Zucchella, A., Jones, M. V., & McDougall-Covin, P. P. (2012). Internationalization, innovation and entrepreneurship: Business models for new technology-based firms. Journal of Management and Governance, 16(3), 337–368.

    Google Scholar 

  • Parsley, C. J. (1980). Labor union effects on wage gains: A survey of recent literature. Journal of Economic Literature, 18(1), 1–31.

    Google Scholar 

  • Penrose, E. T. (1959). The theory of the growth of the firm. New York: Wiley.

    Google Scholar 

  • Rich, B. L., Lepine, J. A., & Crawford, E. R. (2010). Job engagement: Antecedents and effects on job performance. Academy of Management Journal, 53(3), 617–635.

    Google Scholar 

  • Richardson, G. B. (1996). Competition, innovation and increasing returns. Danish Research Unit for Industrial Dynamics (DRUID). Working paper, (96-10).

  • Romijn, H., & Albaladejo, M. (2002). Determinants of innovation capability in small electronics and software firms in southeast England. Research Policy, 31, 1053–1067.

    Google Scholar 

  • Roper, S., & Love, J. H. (2002). Innovation and export performance: Evidence from the UK and German manufacturing plants. Research Policy, 31(7), 1087–1102.

    Google Scholar 

  • Rosenkranz, S. (1995). Innovation and cooperation under vertical product differentiation. International Journal of Industrial Organization, 13(1), 1–22.

    Google Scholar 

  • Rynes, S. L., & Barber, A. E. (1990). Applicant attraction strategies: An organizational perspective. Academy of Management Review, 15, 286–310.

    Google Scholar 

  • Salanova, M., & Schaufeli, W. B. (2008). A cross-national study of work engagement as a mediator between job resources and proactive behavior. International Journal of Human Resource Management, 19(1), 116–131.

    Google Scholar 

  • Santarelli, E., & Sterlacchini, A. (1990). Innovation, formal vs. informal R&D, and firm size: Some evidence from Italian manufacturing firms. Small Business Economics, 2, 223–228.

    Google Scholar 

  • Scherer, F. M. (1970). Industrial market structure and economic performance. Chicago: Rand McNally.

    Google Scholar 

  • Schneiberg, M., & Bartley, T. (2001). Regulating American industries: Markets, politics, and the institutional determinants of fire insurance regulation. American Journal of Sociology, 107(1), 101–146.

    Google Scholar 

  • Schroth, E. (2006). Innovation. Differentiation, and the choice of an underwriter: Evidence from equity-linked securities, review of financial studies, 19(3), 1041–1080.

    Google Scholar 

  • Schuler, R., & Jackson, S. (1987). Linking competitive strategies and human resource management practices. Academy of Management Executive, 1(3), 207–219.

    Google Scholar 

  • Shaukat, A., Qiu, Y., & Trojanowski, G. (2015). Board attributes, corporate social responsibility strategy, and corporate environmental and social performance. Journal of Business Ethics, 135(3), 569–585.

    Google Scholar 

  • Sternberg, R., & Arndt, O. (2001). The firm or the region: What determines the innovation behavior of European firms? Economic Geography, 77(4), 364–382.

    Google Scholar 

  • Stock, G. N., Greis, N. P., & Fischer, W. A. (2002). Firm size and dynamic technological innovation. Technovation, 22(9), 537–549.

    Google Scholar 

  • Storey, J. (2000). The management of innovation problem. International Journal of Innovation Management, 4(3), 347–369.

    Google Scholar 

  • Surroca, J., Tribó, J. A., & Waddock, S. (2010). Corporate responsibility and financial performance: The role of intangible resources. Strategic Management Journal, 31(5), 463–490.

    Google Scholar 

  • Tang, H., & Liang, W. (2005). Analysis and evaluation for innovation performance of region innovative system. Science Technology and Industrial, 7, 10–15.

    Google Scholar 

  • Tian, X., & Wang, T. Y. (2014). Tolerance for failure and corporate innovation. Review of Financial Studies, 27(1), 211–255.

    Google Scholar 

  • Tourigny, D., & Le, C. (2004). Impediments to innovation faced by Canadian firms. Economics of Innovation and New Technology, 13(3), 217–250.

    Google Scholar 

  • Truss, K., Soane, E., Edwards, C. Y. L., Wisdom, K., Croll, A., & Burnett, J. (2006). Working life: employee attitudes and engagement 2006. Wimbledon: Chartered Institute of Personnel and Development.

    Google Scholar 

  • Tsai, W. (2001). Knowledge transfer in intraorganizational networks: Effects of network position and absorptive capacity on business unit innovation and performance. Academy of Management Journal, 44, 996–1004.

    Google Scholar 

  • United Nations Development Programme, & Malik, K. (2014). Human development report 2014: Sustaining human progress-reducing vulnerabilities and building resilience (PDF). UN.

  • Veugelers, R., & Cassiman, B. (1999). Make and buy in innovation strategies: Evidence from Belgian manufacturing firms. Research Policy, 28, 63–80.

    Google Scholar 

  • Vries, R. E., Hooff, B. V., & Ridder, J. A. (2006). Explaining knowledge sharing the role of team communication styles, job satisfaction, and performance beliefs. Communication Research, 33(2), 115–135.

    Google Scholar 

  • Wakelin, K. (1998). Innovation and export behavior at the firm level. Research Policy, 26, 829–841.

    Google Scholar 

  • Wang, H. C., He, J., & Mahoney, J. T. (2009). Firm-specific knowledge resources and competitive advantage: The roles of economic-and relationship-based employee governance mechanisms. Strategic Management Journal, 30(12), 1265–1285.

    Google Scholar 

  • Wang, W., Wu, C., & Liu, X. (2008). Political connection and market valuation: Evidence from China individual-controlled listed firms. Economic Research Journal, 7, 130–141.

    Google Scholar 

  • Weil, D. (1991). Enforcing OSHA: The role of labor unions. Industrial Relations, 30(1), 20–36.

    Google Scholar 

  • Whitener, E. M. (2001). Do “high commitment” human resource practices affect employee commitment? A cross-level analysis using hierarchical linear modeling. Journal of Management, 27(5), 515–535.

    Google Scholar 

  • Yee, R. W., Yeung, A. C., & Cheng, T. E. (2010). An empirical study of employee loyalty, service quality and firm performance in the service industry. International Journal of Production Economics, 124(1), 109–120.

    Google Scholar 

  • Zhang, M., Ma, L., Su, J., & Zhang, W. (2014). Do suppliers applaud corporate social performance? Journal of Business Ethics, 121(4), 543–557.

    Google Scholar 

  • Zhou, H., Dekker, R., & Kleinknecht, A. (2011). Flexible labor and innovation performance: Evidence from longitudinal firm-level data. Industrial and Corporate Change, 20(3), 941–968.

    Google Scholar 

  • Zhou, J., & George, J. M. (2003). Awakening employee creativity: The role of leader emotional intelligence. Leadership Quarterly, 14, 545–568.

    Google Scholar 

Download references

Acknowledgements

The authors thank the following financial support: National Natural Science Foundation of China (Nos. 71502014, 71572192,71672188), the Ministry of Education in China Project of Humanities and Social Sciences (No. 15YJA630101), the Collaborative Innovation Centre for State-owned Assets Administration of Beijing Technology and Business University (GZ20130801), the Excellent young scholars Research Fund of Beijing Institute of Technology (2014YG2115), and the Outstanding Innovative Talents Cultivation Funded Programs 2016 of Renmin Univertity of China.

Author information

Authors and Affiliations

  1. School of Business, Renmin University of China, Beijing, China

    Lijing Tong & Min Zhang

  2. School of Management and Economics, Beijing Institute of Technology, Beijing, China

    Ningyue Liu

  3. the Collaborative Innovation Centre for State-owned Assets Administration, Beijing, China

    Min Zhang

  4. School of Economics and Management, Beijing University of Technology, Beijing, China

    Liming Wang

  5. Irish Institute for Chinese Studies, University College Dublin, Dublin, Ireland

    Liming Wang

Authors
  1. Lijing Tong
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Ningyue Liu
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Min Zhang
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Liming Wang
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding authors

Correspondence to Ningyue Liu or Min Zhang.

Appendix: Variable Definition

Appendix: Variable Definition

Panel A: Dependent variables

 RDI

R&D intensity, which is equal to the total R&D expenditures divided by total employee numbers

 LNRD

The natural logarithm of total R&D expenses

 IP

Dummy variable, which equals 1 if a firm has one or more intellectual properties, and 0 otherwise

 PRODUCT

Dummy variable, which equals 1 if a firm has one or more self-developed products, and 0 otherwise

Panel B: Explanatory variables

 CONTRACT

Labor contract rate, measured by the number of contracted employees divided by total employees

 EPINDEX

The index, constructed by summarizing 9 dummy variables measuring whether firms provide signed labor contracts, labor protection expenses, safety production facilities, medical insurance, endowment insurance, unemployment insurance, work-related injury insurance, maternity insurance, and housing accumulation fund to employees

 LTR

Labor turnover rate, measured by the net increase (decrease) number of employees divided by total employees

 UNION

Dummy variable, which equals 1 if a firm has a labor union, and 0 otherwise

 PC

Dummy variable, which equals 1 if a firm has political connection, and 0 otherwise

Panel C: Control variables

 FIRMAGE

Firm age, measured by 2008 minus firm foundation year

 SIZE

Firm size, measured by the natural logarithm of annual sales revenue

 ROE

Return on total equities, measured by net profit divided by total equities

 ADI

Advertising intensify, measured by annual advertising expenses divided by annual sales revenues

 EXPORT

Export orientation degree, measured by the natural logarithm of annual export sales

Education dummies

 EDU 1

If the top academic degree obtained by the entrepreneur is higher than master’s degree, then EDU1 equals 1, otherwise EDU1 equals 0

 EDU 2

If the entrepreneur has an undergraduate degree as his/her highest educational level, then EDU2 equals 1, otherwise EDU2 equals 0

 EDU 3

If the entrepreneur ended his/her academic studies after getting a graduate diploma from high school, then EDU3 equals 1, otherwise EDU3 equals 0

Region dummies

 EAST

EAST equals 1 if the firm is located in East China, and equals 0 otherwise

 WEST

WEST equals 1 if the firm is located in West China, and equals 0 otherwise

 MIDDLE

MIDDLE equals 1 if the firm is located in Central China, and equals 0 otherwise

 NORTH

NORTH equals 1 if the firm is located in North China, and equals 0 otherwise

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Tong, L., Liu, N., Zhang, M. et al. Employee Protection and Corporate Innovation: Empirical Evidence from China. J Bus Ethics 153, 569–589 (2018). https://doi.org/10.1007/s10551-016-3412-3

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-016-3412-3

Keywords

Search

Navigation