Enterprise Formation and Labor Market Institutions
The paper introduces a model of enterprise formationin a unionized economy with labor protection and wage bargaining. Enterprise formation is subject to future market risk and is shaped by labor market institutions in the post-entry stage. The predictions of the model are tested in cross-section OECD data on 19 economies over 1978-98. Support is found for the view that enterprise formation is adversely affected by economic risks, unemployment compensation, union power, and labor protection variables.
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|Date of creation:||2000|
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