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Employment Protection and Product Market Competition

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  • Sebastian G. Kessing

Abstract

A firm facing employment protection will defend its market position more fiercely than a rival firm operating without such restrictions. However, "ex ante" such firms may be more reluctant to expand. For the benchmark case of contest competition, the defensive effect dominates. A firm facing employment protection has a stronger average market position. Copyright The editors of the "Scandinavian Journal of Economics" 2006 .

Suggested Citation

  • Sebastian G. Kessing, 2006. "Employment Protection and Product Market Competition," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(2), pages 339-352, July.
    • Handle: RePEc:bla:scandj:v:108:y:2006:i:2:p:339-352
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    References listed on IDEAS

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    1. Giulio Fella, 2000. "Investment in General Training with Consensual Layoffs," Working Papers 418, Queen Mary University of London, School of Economics and Finance.
    2. Glazer, A. & Kanniainen, V., 2000. "The Effects of Employment Protection on the Choice of Risky Projects," University of Helsinki, Department of Economics 487, Department of Economics.
    3. Koeniger, Winfried, 2002. "Employment Protection, Product Market Competition and Growth," IZA Discussion Papers 554, Institute for the Study of Labor (IZA).
    4. Saint-Paul, Gilles, 2002. "Employment protection, international specialization, and innovation," European Economic Review, Elsevier, vol. 46(2), pages 375-395, February.
    5. Konrad, Kai A., 2000. "Trade contests," Journal of International Economics, Elsevier, vol. 51(2), pages 317-334, August.
    6. Dan Kovenock & Michael R. Baye & Casper G. de Vries, 1996. "The all-pay auction with complete information (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 291-305.
    7. Konrad, Kai A., 2001. "Repeated Expropriation Contests and Foreign Direct Investment," CEPR Discussion Papers 2695, C.E.P.R. Discussion Papers.
    8. Stergios Skaperdas & Constantinos Syropoulos, 2002. "Insecure Property and the Efficiency of Exchange," Economic Journal, Royal Economic Society, vol. 112(476), pages 133-146, January.
    9. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 283-290.
    10. Dixit, Avinash K, 1987. "Strategic Behavior in Contests," American Economic Review, American Economic Association, vol. 77(5), pages 891-898, December.
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    Cited by:

    1. repec:eee:labeco:v:46:y:2017:i:c:p:77-93 is not listed on IDEAS
    2. Caparrós, Alejandro & Péreau, Jean-Christophe & Tazdaït, Tarik, 2013. "Emission trading and international competition: The impact of labor market rigidity on technology adoption and output," Energy Policy, Elsevier, vol. 55(C), pages 36-43.
    3. Kjell Erik Lommerud & Odd Rune Straume, 2012. "Employment Protection Versus Flexicurity: On Technology Adoption in Unionised Firms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(1), pages 177-199, March.
    4. Helmedag Fritz, 2005. "Möglichkeiten und Grenzen eines Beschäftigungspaktes / Potentials and Limits of an Alliance for Jobs," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 225(2), pages 151-162, April.
    5. Lommerud, Kjell Erik & Straume, Odd Rune, 2007. "Technology resistance and globalisation with trade unions: the choice between employment protection and flexicurity," Working Papers in Economics 13/07, University of Bergen, Department of Economics.
    6. Koeniger, Winfried, 2005. "Dismissal costs and innovation," Economics Letters, Elsevier, vol. 88(1), pages 79-84, July.
    7. Jan I. Haaland & Ian Wooton, 2007. "Domestic Labor Markets and Foreign Direct Investment," Review of International Economics, Wiley Blackwell, vol. 15(3), pages 462-480, August.
    8. Geleilate, José-Mauricio G. & Magnusson, Peter & Parente, Ronaldo C. & Alvarado-Vargas, Marcelo J., 2016. "Home Country Institutional Effects on the Multinationality–Performance Relationship: A Comparison Between Emerging and Developed Market Multinationals," Journal of International Management, Elsevier, vol. 22(4), pages 380-402.
    9. Dewit, Gerda & Leahy, Dermot & Montagna, Catia, 2012. "Employment Protection, Flexibility and Firms’ Strategic Location Decisions under Uncertainty," SIRE Discussion Papers 2012-24, Scottish Institute for Research in Economics (SIRE).
    10. Gerda Dewit & Dermot Leahy & Catia Montagna, 2013. "Employment Protection, Flexibility and Firms' Strategic Location Decisions under Uncertainty," Economica, London School of Economics and Political Science, vol. 80(319), pages 441-474, July.

    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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