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Enterprise Formation and Labor Market Institutions

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  • Vesa Kanniainen
  • Timo Vesala

Abstract

The paper introduces a model of enterprise formation in a unionized economy with labor protection and wage bargaining. Enterprise formation is subject to future market risk and is shaped by labor market institutions in the post-entry stage. The predictions of the model are tested in cross-section OECD data on 19 economies over 1978-98. Support is found for the view that enterprise formation is adversely affected by economic risks, unemployment compensation, union power, and labor protection variables.

Suggested Citation

  • Vesa Kanniainen & Timo Vesala, 2000. "Enterprise Formation and Labor Market Institutions," CESifo Working Paper Series 359, CESifo.
    • Handle: RePEc:ces:ceswps:_359
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Vesa Kanniainen & Panu Poutvaara, 2007. "Imperfect Transmission of Tacit Knowledge and other Barriers to Entrepreneurship," CESifo Working Paper Series 2053, CESifo.
    2. Vesa Kanniainen & Mikko Leppämäki, 2009. "Union power, entrepreneurial risk, and entrepreneurship," Small Business Economics, Springer, vol. 33(3), pages 293-302, October.
    3. Andreas Wagener, 2001. "Entrepreneurship and Social Security," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(3), pages 284-315, May.

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    More about this item

    Keywords

    Entrepreneurship; labor protection; labor unions;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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