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Labour market institutions, product market regulation and innovation: Cross-country evidence

Author

Listed:
  • Andrea Bassanini

    () (CEPN - Centre d'Economie de l'Université Paris Nord (ancienne affiliation) - UP13 - Université Paris 13 - CNRS - Centre National de la Recherche Scientifique)

  • Ekkehard Ernst

Abstract

In this paper we present comparative evidence from OECD countries concerning the impact of product and labour market regulations on innovation. While product and labour market policies usually aim at objectives other than innovation, they may have important consequences for the profitability of firms’ innovative strategies. Our regression analysis provides some cross-country evidence that enhancing competition in the product market -- while guaranteeing intellectual property rights -- seems to have a positive impact on the innovation performance of a country. Conversely, the relationship between innovation and job protection does not seem to be univocal. The sign and magnitude of the effect of the latter crucially depends on the systems of industrial relations and the specific characteristics of each industry. Indeed, the larger the scope for resorting to internal labour markets, the lower the adjustment costs imposed by labour market regulation. Moreover, in industries with a ... Institutions du marché du travail, réglementation du marché des produits et innovation : Evidence en coupe transversale Dans ce papier nous présentons de l’évidence comparative concernant l’impact de la réglementation des marchés du travail et des produits sur l’innovation dans les pays de l’OCDE. Même si une telle réglementation a en général pour but des objectives autres que l’innovation, elle peut avoir des conséquences importantes pour la rentabilité des stratégies innovatrices des entreprises. Nos régressions avancent de l’évidence transversale qu’une augmentation de la concurrence sur le marché des produits – tout en garantissant les droits de propriété intellectuelle – semble avoir un impact positif sur la performance innovatrice d’un pays. En revanche, la relation entre l’innovation et la protection de l’emploi ne semble pas être sans ambiguïté. Le signe et l’importance de cette dernière dépend de manière cruciale du système des relations industrielles et des caractéristiques de ch
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Andrea Bassanini & Ekkehard Ernst, 2006. "Labour market institutions, product market regulation and innovation: Cross-country evidence," Post-Print halshs-00120608, HAL.
  • Handle: RePEc:hal:journl:halshs-00120608
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00120608
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    Keywords

    institutions; regulation; innovation;

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • 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

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