Research Seminar by Professor Frank ZHOU

Department : Accounting and Management Control

Speaker : Frank ZHOU (From Wharton University of Pennsylvania)

Room : T006 and by Zoom https://hec-fr.zoom.us/j/93951516032

“Non-Disclosure Agreement and the Market for Talent”

Abstract:

This paper examines how information frictions in workplace issues affect employers’ incentives to improve workplace conditions and firm outcomes. Leveraging state-level policies that limit the use of Non-Disclosure Agreements (NDAs) to suppress employee discussions of workplace issues, we show that after the enactment of these policies, workplace safety and other working conditions improve and that job vacancies are filled more quickly, indicating improvement in firms’ ability to attract talent. Additional analyses document better firm performance among firms in affected states. Overall, our results are consistent with information frictions in the labor market leading to underinvestment in workplace conditions, which hurts firms’ ability to attract human capital and their financial performance.