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R&D, innovation activity, and the use of external numerical flexibility

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  • Addessi, William
  • Saltari, Enrico
  • Tilli, Riccardo

Abstract

We address theoretically and empirically the impact of R&D and innovation activity (IA) on the use of external numerical flexibility (ENF). We build a firm-sided model showing that a first-order stochastic dominance shift in the productivity distribution function decreases the probability of hiring workers with temporary contracts, while a second-order shift has ambiguous effects. Next, using a dataset based on a survey of Italian manufacturing firms, we find that R&D and IA increase the extensive and intensive margins of employing workers with temporary contracts. Moreover, we disentangle the impact of different types of R&D and IA, finding that extra muros R&D always has a positive effect, while the effect of intra muros R&D is generally null. Also the effect of IA changes according to the type of activity: positive with product innovation, null with process innovation.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 36 (2014)
Issue (Month): C ()
Pages: 612-621

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Handle: RePEc:eee:ecmode:v:36:y:2014:i:c:p:612-621

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Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Flexible employment; Labor contracts; R&D; Innovation activity; Stochastic dominance;

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References

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