Abstract

Young innovative companies are supposed to be key drivers of sustainable economic growth. This study examines the employment growth of young, small innovative firms (denoted as innovative youngsters) and contrasts it with the employment growth of established ‘mature innovators’ in 23 European transition economies, where varying degrees of intellectual property protection apply. The growth figures of the two firm groups vary significantly across different intellectual property rights (IPR) regimes. Innovative youngsters seem to benefit from strong intellectual property protection, while mature innovators exhibit the highest employment growth rates when IPRs are rather weak. These findings point to important undiscovered differences in employment growth patterns, which might explain some of the ambiguous results of former research on IPRs, and provide a reason why certain countries might benefit from strong IPRs while others might not.

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