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Employment Protection And Product Market Competition

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  • Sebastian 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.
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  • Sebastian Kessing, 2004. "Employment Protection And Product Market Competition," Royal Economic Society Annual Conference 2004 50, Royal Economic Society.
    • Handle: RePEc:ecj:ac2004:50
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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," Papers 00-05, California Irvine - School of Social Sciences.
    3. Avinash Dixit, 2008. "Strategic Behavior in Contests," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 431-438, Springer.
    4. Konrad, Kai A., 2000. "Trade contests," Journal of International Economics, Elsevier, vol. 51(2), pages 317-334, August.
    5. Michael R. Baye & Dan Kovenock & Casper G. Vries, 1996. "The all-pay auction with complete information," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 209-223, Springer.
    6. Konrad, Kai A., 2001. "Repeated Expropriation Contests and Foreign Direct Investment," CEPR Discussion Papers 2695, C.E.P.R. Discussion Papers.
    7. Bartelsman, Eric & Haltiwanger, John C. & Scarpetta, Stefano, 2004. "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," IZA Discussion Papers 1374, Institute of Labor Economics (IZA).
    8. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 283-290.
    9. Saint-Paul, Gilles, 2002. "Employment protection, international specialization, and innovation," European Economic Review, Elsevier, vol. 46(2), pages 375-395, February.
    10. Koeniger, Winfried, 2002. "Employment Protection, Product Market Competition and Growth," IZA Discussion Papers 554, Institute of Labor Economics (IZA).
    11. Stergios Skaperdas & Constantinos Syropoulos, 2002. "Insecure Property and the Efficiency of Exchange," Economic Journal, Royal Economic Society, vol. 112(476), pages 133-146, January.
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    Cited by:

    1. Bastgen, A. & Holzner, C.L., 2017. "Employment protection and the market for innovations," Labour Economics, Elsevier, vol. 46(C), pages 77-93.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. Johan E. Eklund & Emma Lappi, 2018. "Product regulations and persistence of profits: OECD evidence," Journal of Regulatory Economics, Springer, vol. 54(2), pages 147-164, October.
    7. 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.
    8. 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).
    9. 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.
    10. Gheorghe MATEI & Marius Daniel STANESCU, 2018. "Foreign Direct Investments - Sustainable Development Factor," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 17(3), pages 27-34.
    11. Kozlovskaya, A. N. & Rukhman, E. E., 2017. "Identification of regional labor factors of influence on costs for innovation of enterprises in the region," R-Economy, Ural Federal University, Graduate School of Economics and Management, vol. 3(4), pages 243-250.
    12. 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.
    13. Koeniger, Winfried, 2005. "Dismissal costs and innovation," Economics Letters, Elsevier, vol. 88(1), pages 79-84, July.

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    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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