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The Optimality And Overuse Of Labour In Estonian Manufacturing Enterprises Author info | Abstract | Publisher info | Download info | Related research | Statistics Jaan Masso
Almas Heshmati
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For transition economies labour market flexibility is necessary for successful restructuring and reallocation of labour force and for coping with the requirements of the European Monetary Union. In this paper we apply a novel approach to the issue of labour market flexibility in transition countries by studying the optimality and efficiency of labour usage among Estonian manufacturing enterprises. A dynamic model is employed where both the long run optimal level of employment and the speed at which actual employment is adjusted to the optimal are modelled as functions of several variables. Firm level panel data from 1995 to 1999 were used. The results showed that in the long run employment responds greatest to wages, followed by value-added and capital stock. Speed of adjustment and labour use optimality and efficiency show much greater variations over firms than over time. In the course of time there occurs both labour saving technical change and an increase in the efficiency of labour usage. On average there is shortage of labour compared to firm’s own optimal level, while over use of labour compared to best-practice technology. Capital seems to be a binding constraint on the development of employment in the Estonian labour market.
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Paper provided by Faculty of Economics and Business Administration, University of Tartu (Estonia) in its series University of Tartu - Faculty of Economics and Business Administration Working Paper Series with number
20.
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Length: 58 pages
Date of creation: 2003Date of revision:
Handle: RePEc:mtk:febawb:20Contact details of provider: Postal: Narva mnt 4, 51009 Tartu Phone: (+372 7) 376 310 Fax: (+372 7) 376 312 Email: Web page: http://www.mtk.ut.ee More information through EDIRC
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Keywords: labour ; efficiency ; employment ; flexibility ; Estonia ; Other versions of this item:
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Kumbhakar, Subal C. & Heshmati, Almas & Hjalmarsson, Lennart, 2000.
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"Objectives and Constraints of Entrepreneurs: Evidence from Small and Medium Size Enterprises in Russia and Bulgaria ,"
William Davidson Institute Working Papers Series
346, William Davidson Institute at the University of Michigan Stephen M. Ross Business School.
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Pissarides, Francesca & Singer, Miroslav & Svejnar, Jan, 2003.
"Objectives and Constraints of Entrepreneurs: Evidence from Small and Medium-Size Enterprises in Russia and Bulgaria ,"
CEPR Discussion Papers
4142, C.E.P.R. Discussion Papers.
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"Objectives and constraints of entrepreneurs: evidence from small and medium size enterprises in Russia and Bulgaria ,"
Journal of Comparative Economics ,
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[Downloadable!] (restricted) Helena Hannula & Katrin Tamm, 2002.
"Restructuring And Efficiency In The Estonian Manufacturing Industry: The Role Of Foreign Ownership ,"
University of Tartu - Faculty of Economics and Business Administration Working Paper Series
15, Faculty of Economics and Business Administration, University of Tartu (Estonia), revised 2003.
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Faggio, Giulia & Konings, Jozef, 1999.
"Gross Job Flows and Firm Growth in Transition Countries: Evidence Using Firm Level Data on Five Countries ,"
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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Discussion Papers
1041, The Research Institute of the Finnish Economy.
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Maaja Vadi, 2003.
"Background to the organisational culture developments in transitional Estonia ,"
University of Tartu - Faculty of Economics and Business Administration ,
in: Organisational Culture in Estonia : Manifestations and Consequences, volume 16, chapter 1, pages 27-46
Faculty of Economics and Business Administration, University of Tartu (Estonia).
[Downloadable!]
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