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R&D, innovation activity, and the use of external numerical flexibility

Addessi, William and Saltari, Enrico and Tilli, Riccardo (2014) R&D, innovation activity, and the use of external numerical flexibility. Economic modelling, Vol. 36 , p. 612-621. ISSN 0264-9993. eISSN 1873-6122. Article.

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DOI: 10.1016/j.econmod.2013.04.026


We address theoretically and empirically the impact of R&D and innovation activity (IA) on the use of external numerical flexibility (ENF). We build a firm-sided model showing that a first-order stochastic dominance shift in the productivity distribution function decreases the probability of hiring workers with temporary contracts, while a second-order shift has ambiguous effects. Next, using a dataset based on a survey of Italian manufacturing firms, we find that R&D and IA increase the extensive and intensive margins of employing workers with temporary contracts. Moreover, we disentangle the impact of different types of R&D and IA, finding that extra muros R&D always has a positive effect, while the effect of intra muros R&D is generally null. Also the effect of IA changes according to the type of activity: positive with product innovation, null with process innovation.

Item Type:Article
ID Code:9839
Uncontrolled Keywords:Flexible employment, labor contracts, R&D, innovation activity, stochastic dominance
Subjects:Area 13 - Scienze economiche e statistiche > SECS-P/01 Economia politica
Divisions:001 Università di Sassari > 01-a Nuovi Dipartimenti dal 2012 > Scienze economiche e aziendali
Publisher:Elsevier Science
Copyright Holders:© 2013 Elsevier
Deposited On:30 May 2014 10:09

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