Employment Protection, International Specialization, and innovation /
We develop a model to analyze the implications of firing costs on incentives for R and D and international specialization. The key idea is that, to avoid paying firing costs, the country with a rigid labor market will tend to produce relatively secure goods, at a late stage of their product life cyc...
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| Format: | Journal |
| Language: | English |
| Published: |
Washington, D.C. :
International Monetary Fund,
1996.
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| Series: | IMF Working Papers; Working Paper ;
No. 1996/016 |
| Online Access: | Full text available on IMF |
| Summary: | We develop a model to analyze the implications of firing costs on incentives for R and D and international specialization. The key idea is that, to avoid paying firing costs, the country with a rigid labor market will tend to produce relatively secure goods, at a late stage of their product life cycle. Under international trade, an international product cycle emerges where, roughly, new goods are first produced in the low firing cost country and then move to the high firing cost country. We show that in the closed economy, an increase in firing costs does not necessarily imply a reduction in R and D; it crucially depends on the riskiness of R and D activity relative to production activity. In the open economy, however, an increase in firing cost is much more likely to reduce R and D intensity. |
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| Item Description: | <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required |
| Physical Description: | 1 online resource (24 pages) |
| Format: | Mode of access: Internet |
| ISSN: | 1018-5941 |
| Access: | Electronic access restricted to authorized BRAC University faculty, staff and students |