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How labor regulation a.ects innovation and investment: A neo-Schumpeterian approach


  • Giorgio Calcagnini

    (Department of Economics, Society, and Politics Universita' di Urbino Carlo Bo)

  • Germana Giombini

    (Department of Economics, Society, and Politics Universita' di Urbino Carlo Bo)

  • Giuseppe Travaglini

    (Universita' di Urbino Carlo Bo, Facolta' di Economia, DESP, Dipartimento di Economia Societa' e Politica)


Theoretical and empirical models provide ambiguous responses on the relationship between labor regulation, innovation and investment. Labor regulation tends to raise firms. adjustment costs. But, also, labor regulation stimulates firms to make innovations and investment 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 a.ect innovation and investment.

Suggested Citation

  • Giorgio Calcagnini & Germana Giombini & Giuseppe Travaglini, 2016. "How labor regulation a.ects innovation and investment: A neo-Schumpeterian approach," Mo.Fi.R. Working Papers 132, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  • Handle: RePEc:anc:wmofir:132

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    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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