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Relationships, Commitment, and Labor Productivity Growth

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Author Info

  • Patrick Francois

    (CentER, Tilburg University, and University of British Columbia,)

  • Joanne Roberts

    (University of Toronto,)

Abstract

This paper analyzes the interactions between growth and the contracting environment in production. With incompleteness in contracting, a firm's capacity to commit to its workers will depend on institutional frictions such as hiring and firing costs. This interaction of contracting structure and relationship costs will in part determine firms' technology choices. We suggest this as a possible explanation of the differential rates of labor productivity growth in Europe and the United States. (JEL: O31, O33, O38, O40, L16) Copyright (c) 2003 The European Economic Association.

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Bibliographic Info

Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 1 (2003)
Issue (Month): 2-3 (04/05)
Pages: 612-620

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Handle: RePEc:tpr:jeurec:v:1:y:2003:i:2-3:p:612-620

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Cited by:
  1. Martimort, David & Verdier, Thierry, 2002. "From Inside the Firm to the Growth Process," IDEI Working Papers 147, Institut d'Économie Industrielle (IDEI), Toulouse.

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