Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/332933 
Year of Publication: 
2014
Citation: 
[Journal:] Wirtschaft und Gesellschaft (WuG) [ISSN:] 0378-5130 [Volume:] 40 [Issue:] 3 [Year:] 2014 [Pages:] 417-428
Publisher: 
Kammer für Arbeiter und Angestellte für Wien, Wien
Abstract: 
Mainstream economists continually plea for "structural reforms" of labour markets aiming at easier firing, more (downward) wage flexibility and a more modest welfare state. In Anglo-Saxon countries like the USA, Australia, New Zealand or the UK, such reforms already took place, while "Old Europe" is lagging behind. This paper gives theoretical arguments why such structural reforms are damaging to innovation. Empirical studies show that such arguments are realistic. Studies at macro and at enterprise level show that a "Garage Business" model of innovation (as in Silicon Valley) can still function under a "hire & fire" labour market regime; Schumpeter's "routine model" of innovation, however, is functioning much better under rigid "Old Europe" labour market regimes. Our findings may explain why US firms in established industries like automobiles have hard times competing against European or Japanese supplier.
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.