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How labor regulation affects innovation and investment: A neo-Schumpeterian approach

Author

Listed:
  • Giorgio Calcagnini

    (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo")

  • Germana Giombini

    (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo)

  • Giuseppe Travaglini

    (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo)

Abstract

Theoretical and empirical models provide ambiguous responses on the relationship among labor regulation, innovation and investment. Labor regulation tends to raise frms' adjustment costs. But, also labor regulation stimulates firms to make innovations and investments to recover productivity in the long-run. In this paper we present a neo- Schumpeterian endogenous growth model, which explains how these opposite forces operate over time, and why a stricter labor regulation may positively affect innovation and investment. Length: 44 pages

Suggested Citation

  • Giorgio Calcagnini & Germana Giombini & Giuseppe Travaglini, 2016. "How labor regulation affects innovation and investment: A neo-Schumpeterian approach," Working Papers 1604, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2016.
    • Handle: RePEc:urb:wpaper:16_04
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    Keywords

    Endogenous growth model; Labor regulation; Innovation; Investment;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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