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Uncertainty, flexible labour relations and R&D expenditure

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  • Grassi, Emanuele
  • Di Cintio, Marco

Abstract

This paper examines the effects of uncertainty and flexible labour contracts on the Research and Development (R&D) expenditure. Using a panel of Italian manufacturing firms, we find a hump-shaped relationship between workforce flexibility and R&D outlays. Moreover, as predicted by the real options theory, our results suggest that product market uncertainty reduces R&D efforts and that flexible labour contracts countervail the adverse effect of uncertainty on R&D.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37646.

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Date of creation: 26 Mar 2012
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Handle: RePEc:pra:mprapa:37646

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Keywords: Real options theory; R&D; uncertainty; temporary workers;

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  20. Barbosa, Natália & Faria, Ana Paula, 2011. "Innovation across Europe: How important are institutional differences?," Research Policy, Elsevier, vol. 40(9), pages 1157-1169.
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