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Unemployment and Innovation Patterns. The role of business coordination and market Competition

  • Donatella Gatti

    (PSE & IZA)

The paper explores the institutional determinants of differences in European, Japanese and American unemployment and innovation pattern in a „comparative institutional analysis“ perspective. Building on the definition of different modes of coordination among firms, the question is addressed as to how institutional settings affect firms’ innovation strategy. A generalized efficiency wage model is developed determining both equilibrium unemployment and innovation. The mode of coordination is shown to affect firms’ choice between radical and incremental innovations as well as firms’ response (in terms of innovation strategy) to increased competitive pressure. Higher unemployment may result as a consequence of specialization along innovation trajectories.

(This abstract was borrowed from another version of this item.)

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File URL: http://econwpa.repec.org/eps/mac/papers/0507/0507011.pdf
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Paper provided by EconWPA in its series Macroeconomics with number 0507011.

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Date of creation: 08 Jul 2005
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Handle: RePEc:wpa:wuwpma:0507011
Note: Type of Document - pdf
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, March.
  2. Aoki, Masahiko, 1986. "Horizontal vs. Vertical Information Structure of the Firm," American Economic Review, American Economic Association, vol. 76(5), pages 971-83, December.
  3. Aghion, Philippe & Howitt, Peter, 1994. "Growth and Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 477-94, July.
  4. Bruno AMABLE, 1996. "Croisssance et cycles endogènes induits par les innovations radicales et incrementales," Annales d'Economie et de Statistique, ENSAE, issue 44, pages 91-110.
  5. Soskice, David, 1996. "German technology policy, innovation, and national institutional frameworks," Discussion Papers, Research Unit: Economic Change and Employment FS I 96-319, Social Science Research Center Berlin (WZB).
  6. D. Gatti, 1997. "Flexible Technology, Unemployment and Effort: The Role of the Organization of the Firm," Working Papers ir97004, International Institute for Applied Systems Analysis.
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