Flexible labor and innovation performance: Evidence from longitudinal firm-level data

Flexible labor and innovation performance: Evidence from longitudinal firm-level data

Dekker, R (Ronald.Dekker@tudelft.nl; TU Delft, Technology, Policy and Management, Innovation Systems)
Kleinknecht, A.H. (A.H.Kleinknecht@tudelft.nl; TU Delft, Technology, Policy and Management, Innovation Systems)
Zhou, H (Erasmus University Rotterdam, Erasmus School of Economics, CASBEC)

2010-04-12

Firms with high shares of workers on fixed-term contracts have significantly higher sales of imitative new products but perform significantly worse on sales of innovative new products (“first on the market”). High functional flexibility in “insider-outsider” labor markets enhances a firm’s new product sales, as do training efforts and highly educated personnel. We find weak evidence that larger and older firms have higher new product sales than do younger and smaller firms. Our findings should be food for thought to economists making unqualified pleas for the deregulation of labor markets.

Innovation performance
new product sales
numerical flexibility
functional flexibility
SMEs
OSA longitudinal data
RePEc

J5
M5
O15
O31

http://resolver.tudelft.nl/uuid:ba180658-da35-4470-a3ee-c03c48657e40

Economics and Management of Innovation

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working paper