IDEAS home Printed from https://ideas.repec.org/p/cpm/cepmap/0117.html
   My bibliography  Save this paper

Labour market regulation, industrial relations, and technological regimes: a tale of comparative advantage

Author

Listed:
  • Bassanini, Andrea
  • Ernst, Ekkehard

Abstract

In this paper we present comparative evidence from OECD countries concerning the impact of labour market institutions and regulations on technological specialisation. The interplay between the degree of labour market flexibility, the systems of industrial relations and the knowledge base of different industries determines the viability of different human resource strategies thereby shaping the patterns of comparative advantage. Our empirical results show that countries with coordinated industrial-relations systems and strict employment protection tend to specialise in industries with a cumulative knowledge base. We argue that two mechanisms explain these patterns. The larger the scope for resorting to internal labour markets, the lower the adjustment costs imposed by labour market regulation. Furthermore, employment protection and coordinated industrial-relations regimes, by aligning workers' and firms' objectives, encourage firm-sponsored training as well as the accumulation of firm-specific competencies, allowing firms to fully exploit the potential of the international labour marke.

Suggested Citation

  • Bassanini, Andrea & Ernst, Ekkehard, 2001. "Labour market regulation, industrial relations, and technological regimes: a tale of comparative advantage," CEPREMAP Working Papers (Couverture Orange) 0117, CEPREMAP.
  • Handle: RePEc:cpm:cepmap:0117
    as

    Download full text from publisher

    File URL: http://www.cepremap.fr/depot/couv_orange/co0117.ps
    Download Restriction: no

    File URL: http://www.cepremap.fr/depot/couv_orange/co0117.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Steven Casper & Mark Lehrer & David Soskice, 1999. "Can High-technology Industries Prosper in Germany? Institutional Frameworks and the Evolution of the German Software and Biotechnology Industries," Industry and Innovation, Taylor & Francis Journals, vol. 6(1), pages 5-24.
    2. Acemoglu, Daron, 1997. "Technology, unemployment and efficiency," European Economic Review, Elsevier, vol. 41(3-5), pages 525-533, April.
    3. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory and Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 113(1), pages 79-119.
    4. Kitschelt, Herbert, 1991. "Industrial governance structures, innovation strategies, and the case of Japan: sectoral or cross-national comparative analysis?," International Organization, Cambridge University Press, vol. 45(4), pages 453-493, October.
    5. Jan Boone, 2000. "Competitive Pressure: The Effects on Investments in Product and Process Innovation," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 549-569, Autumn.
    6. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343, National Bureau of Economic Research, Inc.
    7. Agell, Jonas, 1999. "On the Benefits from Rigid Labour Markets: Norms, Market Failures, and Social Insurance," Economic Journal, Royal Economic Society, vol. 109(453), pages 143-164, February.
    8. Malerba, Franco & Orsenigo, Luigi, 1995. "Schumpeterian Patterns of Innovation," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 47-65, February.
    9. Steven Casper & Henrik Glimstedt, 2001. "Economic Organization, Innovation Systems, and the Internet," Oxford Review of Economic Policy, Oxford University Press, vol. 17(2), pages 265-281, Summer.
    10. Steven J. Davis, 1992. "Cross-Country Patterns of Change in Relative Wages," NBER Chapters, in: NBER Macroeconomics Annual 1992, Volume 7, pages 239-300, National Bureau of Economic Research, Inc.
    11. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-1171, September.
    12. Orietta Marsili, 2001. "The Anatomy and Evolution of Industries," Books, Edward Elgar Publishing, number 2272.
    13. David Soskice, 1997. "German technology policy, innovation, and national institutional frameworks," Industry and Innovation, Taylor & Francis Journals, vol. 4(1), pages 75-96.
    14. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    15. repec:fth:harver:1473 is not listed on IDEAS
    16. Adriana D. Kugler & Gilles Saint Paul, 2000. "Hiring and firing costs, adverse selection and long-term unemployment," Economics Working Papers 447, Department of Economics and Business, Universitat Pompeu Fabra.
    17. Robert J. Flanagan, 1999. "Macroeconomic Performance and Collective Bargaining: An International Perspective," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1150-1175, September.
    18. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468.
    19. Kugler, Adriana D. & Saint-Paul, Gilles, 2000. "Hiring And Firing Costs, Adverse Selection And The Persistence Of Unemployment," CEPR Discussion Papers 2410, C.E.P.R. Discussion Papers.
    20. Lisa M. Lynch, 1994. "Training and the Private Sector: International Comparisons," NBER Books, National Bureau of Economic Research, Inc, number lync94-1, September.
    21. Ginarte, Juan C. & Park, Walter G., 1997. "Determinants of patent rights: A cross-national study," Research Policy, Elsevier, vol. 26(3), pages 283-301, October.
    22. Malerba, Franco & Orsenigo, Luigi, 1997. "Technological Regimes and Sectoral Patterns of Innovative Activities," Industrial and Corporate Change, Oxford University Press, vol. 6(1), pages 83-117.
    23. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
    24. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-562, October.
    25. McCue, Kristin, 1996. "Promotions and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 175-209, April.
    26. Daron Acemoglu, 1997. "Training and Innovation in an Imperfect Labour Market," Review of Economic Studies, Oxford University Press, vol. 64(3), pages 445-464.
    27. Katz, Eliakim & Ziderman, Adrian, 1990. "Shared investment in general training : the role of information," Policy Research Working Paper Series 535, The World Bank.
    28. Geroski, P A, 1990. "Innovation, Technological Opportunity, and Market Structure," Oxford Economic Papers, Oxford University Press, vol. 42(3), pages 586-602, July.
    29. Chang, Chun & Wang, Yijiang, 1996. "Human Capital Investment under Asymmetric Information: The Pigovian Conjecture Revisited," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 505-519, July.
    30. Temple, Jonathan, 1999. "A positive effect of human capital on growth," Economics Letters, Elsevier, vol. 65(1), pages 131-134, October.
    31. Malerba, Franco & Orsenigo, Luigi, 2000. "Knowledge, Innovation Activities and Industrial Evolution," Industrial and Corporate Change, Oxford University Press, vol. 9(2), pages 289-313, June.
    32. Eichengreen, Barry & Iversen, Torben, 1999. "Institutions and Economic Performance: Evidence from the Labour Market," Oxford Review of Economic Policy, Oxford University Press, vol. 15(4), pages 121-138, Winter.
    33. Katz, Eliakim & Ziderman, Adrian, 1990. "Investment in General Training: The Role of Information and Labour Mobility," Economic Journal, Royal Economic Society, vol. 100(403), pages 1147-1158, December.
    34. James M. Malcomson, 1997. "Contracts, Hold-Up, and Labor Markets," Journal of Economic Literature, American Economic Association, vol. 35(4), pages 1916-1957, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eric Bartelsman & Andrea Bassanini & John Haltiwanger & Ron Jarmin & Stefano Scarpetta & Thorsten Schank, 2002. "The Spread of ICT and Productivity Growth: Is Europe Really Lagging Behind in the New Economy?," CEPN Working Papers halshs-00289168, HAL.
    2. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    3. Bhaskar, V & Holden, Steinar, 2002. "Wage Differentiation via Subsidised General Training," Economics Discussion Papers 8851, University of Essex, Department of Economics.
    4. Malcomson, James M. & Maw, James W. & McCormick, Barry, 2003. "General training by firms, apprentice contracts, and public policy," European Economic Review, Elsevier, vol. 47(2), pages 197-227, April.
    5. John S Heywood & Uwe Jirjahn & Annika Pfister, 2020. "Product market competition and employer provided training in Germany [Technical change, inequality and the labor market]," Industrial and Corporate Change, Oxford University Press, vol. 29(2), pages 533-556.
    6. Casper, Steven & Whitley, Richard, 2004. "Managing competences in entrepreneurial technology firms: a comparative institutional analysis of Germany, Sweden and the UK," Research Policy, Elsevier, vol. 33(1), pages 89-106, January.
    7. Filipe Almeida‐Santos & Karen Mumford, 2005. "Employee Training And Wage Compression In Britain," Manchester School, University of Manchester, vol. 73(3), pages 321-342, June.
    8. Centeno, Mário & Corrêa, Márcio, 2010. "Job matching, technological progress, and worker-provided on-the-job training," Economics Letters, Elsevier, vol. 109(3), pages 190-192, December.
    9. Steffes, Susanne & Warnke, Arne Jonas, 2019. "Determinants of work-related training: An investigation of observed and unobserved firm-, job- and worker-heterogeneity," ZEW Discussion Papers 19-022, ZEW - Leibniz Centre for European Economic Research.
    10. Rao, Neel, 2015. "General training in labor markets: Common value auctions with unobservable investment," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 19-45.
    11. Christos Bilanakos & Colin P. Green & John S. Heywood & Nikolaos Theodoropoulos, 2017. "Do Dominant Firms Provide More Training?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(1), pages 67-95, February.
    12. Stefan Bauernschuster & Oliver Falck & Stephan Heblich, 2009. "Training and Innovation," Journal of Human Capital, University of Chicago Press, vol. 3(4), pages 323-353.
    13. Caliendo, Marco & Cobb-Clark, Deborah A. & Seitz, Helke & Uhlendorff, Arne, 2016. "Locus of Control and Investment in Training," IZA Discussion Papers 10406, Institute of Labor Economics (IZA).
    14. Saïd Hanchane & François Stankiewicz, 2004. "Propositions pour une théorie organisationnelle de la formation : les enseignements de l'enquête Formation continue 2000," Working Papers halshs-00010249, HAL.
    15. Rita Asplund, 2005. "The Provision and Effects of Company Training: A Brief Review of the Literature," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 47-73.
    16. Giulio Pedrini, 2017. "Law and economics of training: a taxonomy of the main legal and institutional tools addressing suboptimal investments in human capital development," European Journal of Law and Economics, Springer, vol. 43(1), pages 83-105, February.
    17. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
    18. van den Berg, Gerard J. & Dauth, Christine & Homrighausen, Pia & Stephan, Gesine, 2018. "Informing Employees in Small and Medium Sized Firms about Training: Results of a Randomized Field Experiment," IZA Discussion Papers 11963, Institute of Labor Economics (IZA).
    19. Maria De Paola & Vincenzo Scoppa, 2002. "Firms' Training Decisions and Unemployment in Italian Labour Markets," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 61(1), pages 103-126, June.
    20. Gersbach, Hans & Schmutzler, Armin, 2001. "A Product Market Theory of Worker Training," IZA Discussion Papers 327, Institute of Labor Economics (IZA).
    21. Anke S. Kessler & Christoph Lülfesmann, 2006. "The Theory of Human Capital Revisited: on the Interaction of General and Specific Investments," Economic Journal, Royal Economic Society, vol. 116(514), pages 903-923, October.

    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpm:cepmap:0117. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/ceprefr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sébastien Villemot (email available below). General contact details of provider: https://edirc.repec.org/data/ceprefr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.