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R&D and Innovation Activities and the Use of External NumericalFlexibility

William Addessi, Enrico Saltari () and Riccardo Tilli ()

No 150, Working Papers from University of Rome La Sapienza, Department of Public Economics

Abstract: We study the impact of R&D and innovation on the use of external numerical flexibility(ENF). R&D and innovation imply both a higher average and a higher volatile productivity.We investigate this ambiguous effect on the firm preference for using ENF in two steps. First,we use a simple model to show that a first-order stochastic dominance shift in the distributionfunction increases the probability of hiring permanent workers, while a second-order shift hasambiguous effects. Next, using a dataset based on a survey of Italian manufacturing firms,we run logit regressions to estimate the effect of R&D and innovation on the probability ofemploying a fixed-term or a TWA worker, finding a positive and always significant effect.We also consider internal and external R&D and different types of innovation. Results showthat the former has a positive effect while the latter depends on the type of innovation.

Keywords: Flexible employment; Labor contracts; Research and Development; Innovation. (search for similar items in EconPapers)
JEL-codes: J41 O33 (search for similar items in EconPapers)
Pages: 26
Date: 2011-11
New Economics Papers: this item is included in nep-cse, nep-ino, nep-knm and nep-sbm
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