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Labour market regulation, industrial relations and technological regimes: a tale of comparative advantage

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  • Andrea Bassanini
  • Ekkehard Ernst

Abstract

In this paper we present comparative evidence from OECD countries concerning the impact of labour market institutions and regulations on technological specialization. The interplay between the degree of labour market flexibility, the system of industrial relations and the knowledge base of different industries determines the viability of different human resource strategies, thereby shaping the patterns of comparative advantage. Our empirical results show that countries with coordinated industrial-relations systems and strict employment protection tend to specialize in industries with a cumulative knowledge base. We argue that two mechanisms explain these patterns. The larger the scope for resorting to internal labour markets, the lower the adjustment costs imposed by labour market regulation. Furthermore, employment protection and coordinated industrial-relations regimes, by aligning workers' and firms' bjectives, encourage firm-sponsored training as well as the accumulation of firm-specific competencies, allowing firms to fully exploit the potential of the internal labour market. Copyright 2002, Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal Industrial and Corporate Change.

Volume (Year): 11 (2002)
Issue (Month): 3 (June)
Pages: 391-426

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Handle: RePEc:oup:indcch:v:11:y:2002:i:3:p:391-426

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Citations

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Cited by:
  1. Simon STURN, 2013. "Are corporatist labour markets different? Labour market regimes and unemployment in OECD countries," International Labour Review, International Labour Organization, vol. 152(2), pages 237-254, 06.
  2. Rachel Griffith & Gareth Macartney, 2010. "Employment protection legislation, multinational firms and innovation," IFS Working Papers W10/01, Institute for Fiscal Studies.
  3. Eichhorst, Werner & Marx, Paul, 2009. "From the Dual Apprenticeship System to a Dual Labor Market? The German High-Skill Equilibrium and the Service Economy," IZA Discussion Papers 4220, Institute for the Study of Labor (IZA).
  4. DiVito, Lori, 2012. "Institutional entrepreneurship in constructing alternative paths: A comparison of biotech hybrids," Research Policy, Elsevier, vol. 41(5), pages 884-896.
  5. Krammer, Sorin M.S., 2009. "Drivers of national innovation in transition: Evidence from a panel of Eastern European countries," Research Policy, Elsevier, vol. 38(5), pages 845-860, June.
  6. Muscio, Alessandro & Nardone, Gianluca & Stasi, Antonio, 2012. "Perceived Technological Regimes: An Empirical Analysis of the Apulian Wine Industry," 2012 International European Forum, February 13-17, 2012, Innsbruck-Igls, Austria 144969, International European Forum on Innovation and System Dynamics in Food Networks.
  7. Herstad, Sverre J. & Aslesen, Heidi Wiig & Ebersberger, Bernd, 2014. "On industrial knowledge bases, commercial opportunities and global innovation network linkages," Research Policy, Elsevier, vol. 43(3), pages 495-504.
  8. Koeniger, Winfried, 2003. "Collective Dismissal Cost, Product Market Competition and Innovation," IZA Discussion Papers 888, Institute for the Study of Labor (IZA).
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  10. Barbosa, Natália & Faria, Ana Paula, 2011. "Innovation across Europe: How important are institutional differences?," Research Policy, Elsevier, vol. 40(9), pages 1157-1169.
  11. Erol Taymaz & Sule Ozler, 2004. "Labor Market Policies and EU Accession: Problems and Prospects for Turkey," ERC Working Papers 0405, ERC - Economic Research Center, Middle East Technical University, revised Mar 2004.
  12. Tylecote, Andrew & Ramirez, Paulina, 2006. "Corporate governance and innovation: The UK compared with the US and 'insider' economies," Research Policy, Elsevier, vol. 35(1), pages 160-180, February.
  13. International Labour Office, 2012. "Global employment trends for youth : 2012," Global Employment Trends Reports 480201, International Labour Office, Economic and Labour Market Analysis Department.
  14. Yılmaz Kılıçaslan & Erol Taymaz, 2008. "Labor market institutions and industrial performance: an evolutionary study," Journal of Evolutionary Economics, Springer, vol. 18(3), pages 477-492, August.
  15. Murphy, Gavin & Siedschlag, Iulia & McQuinn, John, 2012. "Employment Protection and Innovation Intensity," Papers WP445, Economic and Social Research Institute (ESRI).

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