Evaluating innovation and labour market relationships: the case of Italy

Authors: Pieroni, Luca; Pompei, Fabrizio

Source: Cambridge Journal of Economics, Volume 32, Number 2, 27 March 2008 , pp. 325-347(23)

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Abstract:

In this paper the link between labour market flexibility and innovation is analysed paying particular attention to the different technological regimes of economic activities and the different geographical areas of the Italian economy. A dynamic panel data specification is used to assess the endogenous relationship between patents, included as a proxy for innovation, and job turnover and wages, which represent labour market indicators. Our results show that higher job turnover only has a significant and negative impact on patent activities in regional sectors of Northern Italy, while blue and white collar wages have been generally found to have a positive and significant impact on innovation.

Keywords: Labour market flexibility; Innovation; Dynamic panel data; Endogeneity; R12; J40; O31

Document Type: Research article

DOI: http://dx.doi.org/10.1093/cje/bem032

Publication date: 2008-03-27

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The Cambridge Journal of Economics, founded in 1977 in the traditions of Marx, Keynes, Kalecki, Joan Robinson and Kaldor, provides a forum for theoretical, applied, policy and methodological research into social and economic issues.