Paper #256

Título:

Employment protection, international specialization and innovation

Autor:

Gilles Saint Paul

Data:

Enero 1996

Resumen:

We develop a model to analyse the implications of firing costs on incentives for R&D and international specialization. The Key idea is paying the firing cost, 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 will specialize in 'secondary innovations', that is, improvements in existing goods, while the low firing cost country will more specialize in 'primary innovation', that is, invention of new goods.

Palabras clave:

Employment protection, innovation, R&D, international product cycle, labour market flexibility

Códigos JEL:

F12, F17, J21, J32, O3

Área de investigación:

Macroeconomía y Economía Internacional

Publicado en:

European Economic Review 46, pp 375-395

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