R&D, Market Power and the Cyclicality of Employment

Uluc Aysun, Melanie Guldi, Adam Honig and Zeynep Yom

No 2020-01, Working Papers from University of Central Florida, Department of Economics

Abstract: This paper provides a first look into the joint effects of research and development (R&D) and market power on the cyclicality of employment. It presents a theoretical model with R&D and monopolistically competitive firms which shows that firms smooth their R&D activities when they face large R&D adjustment costs. This smoothing behavior comes at the expense of higher labor volatility, and it is stronger for firms with high R&D intensity and low market power. Firm-level data support these predictions. Dynamic panel estimations reveal that employment at competitive firms engaging in a high level of R&D is more procyclical.

Keywords: R&D; employment volatility; firm-level data; COMPUSTAT (search for similar items in EconPapers)
JEL-codes: E30 E32 O30 O33 (search for similar items in EconPapers)
Pages: 45 Pages
Date: 2020-08
New Economics Papers: this item is included in nep-com, nep-mac and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://economics.itweb.ucf.edu/workingpapers/2020-01UA.pdf Full text (application/pdf)

Related works:
Journal Article: R&D, Market Power, and the Cyclicality of Employment (2025)
Working Paper: R&D, Market Power and the Cyclicality of Employment (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cfl:wpaper:2020-01ua

Access Statistics for this paper

More papers in Working Papers from University of Central Florida, Department of Economics
Bibliographic data for series maintained by Uluc Aysun ().