Enterprise Formation and Labor Market Institutions

Vesa Kanniainen and Timo Vesala

No 359, CESifo Working Paper Series from CESifo

Abstract: The paper introduces a model of enterprise formation in a unionized economy with labor protection and wage bargaining. Enterprise formation is subject to future market risk and is shaped by labor market institutions in the post-entry stage. The predictions of the model are tested in cross-section OECD data on 19 economies over 1978-98. Support is found for the view that enterprise formation is adversely affected by economic risks, unemployment compensation, union power, and labor protection variables.

Keywords: Entrepreneurship; labor protection; labor unions (search for similar items in EconPapers)
JEL-codes: J23 J24 J51 M13 (search for similar items in EconPapers)
Date: 2000
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Working Paper: Enterprise Formation and Labor Market Institutions (2000)
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