R&D, innovation activity, and the use of external numerical flexibility
AbstractWe 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 InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 36 (2014)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/inca/30411
Flexible employment; Labor contracts; R&D; Innovation activity; Stochastic dominance;
Find related papers by JEL classification:
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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