Employment Laws Can Hurt Smaller Firms

Professor Sharon Belenzon studied more than 68,000 firms in western Europe and learned that large companies grew faster than smaller firms in countries with stronger employee protection laws. He found that tougher worker protections tend to give bigger companies—or those that form groups—a competitive advantage over smaller firms, who don’t have as much flexibility to move employees around within their organizations.

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Graphic depicting Duke Fuqua Professor Sharon Belezon's research on employment laws in Europe

 

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