Acharya, Viral V.; Baghai, Ramin P.; Subramanian, … - In: Review of Financial Studies 27 (2014) 1, pp. 301-346
We show that wrongful discharge laws--laws that protect employees against unjust dismissal--spur innovation and new firm creation. Wrongful discharge laws, particularly those that prohibit employers from acting in bad faith ex post, limit employers' ability to hold up innovating employees after...