Perceptions and experience of employment regulation in UK small firms

S.L. Carter, C.M. Mason, S.K. Tagg

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Abstract

The view that excessive regulation constrains small business growth has been a persistent theme within business and policy communities, although recent studies have demonstrated the actual effects of regulation to be relatively modest. A prior small-scale study proposed four reasons why employment legislation does 'not damage' small firms. We attempt to assess the robustness of these propositions in a large-scale survey of 16 779 small firms. Results provide empirical support for three propositions. Firstly, perceived dissatisfaction masks actual effects. Secondly, competitive conditions mediate regulatory effects; however, even resource-constrained firms reported few negative effects. Thirdly, informality eases regulatory impact. Results failed to confirm that older laws are 'routinised'. Length of time as a business owner was found to be more influential than age of regulation, with owners who have been in business for many years having a longer 'window of exposure' increasing their likelihood of experiencing negative and positive effects.
Original languageEnglish
Pages (from-to)263-278
Number of pages16
JournalEnvironment and Planning C: Government and Policy
Volume27
Issue number2
Early online date27 Jan 2009
DOIs
Publication statusPublished - Apr 2009

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Keywords

  • employment regulation
  • UK small firms

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