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Article
Publication date: 1 December 2005

Karl Aiginger

The purpose of this paper is to reassess the relative impact of labour market regulation on economic performance. Inflexible labour markets combined with high welfare…

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Abstract

Purpose

The purpose of this paper is to reassess the relative impact of labour market regulation on economic performance. Inflexible labour markets combined with high welfare costs are often thought to be the main cause of low growth in Europe.

Design/methodology/approach

This paper compares the impact of labour market regulation to that of macroeconomic policies (such as fiscal policy, monetary policy, macroeconomic cost management) and to that of investment into future growth (such as research, education and the diffusion of technology). We develop for this purpose a highly stylised model explaining economic growth; we suggest a synthetic measure of performance and use data for the US and Europe for the empirical test.

Findings

The main result is that regulation impacts on growth, the impact of regulatory change is, however, less easy to demonstrate. The impact of macro economic policy can be demonstrated first by the more growth oriented monetary and fiscal policy in the US and the success of some European countries in bringing private and public costs in line with productivity and tax revenues. However, boosting investment into future growth by encouraging research, education and technology diffusion seems to be the most important determinant of performance.

Research limitations/implications

As to the limits of this paper, we have to acknowledge that our analysis refers to a short time period, a small number of countries and uses a highly stylised model.

Practical implications

If the results can be replicated for larger data sets and by more elaborated technical methods, the findings have an important policy implication: country strategies relying only on deregulation, without complementary macroeconomic policy and without strategy to boost “growth drivers” are suboptimal. This questions the policy advice given by some economists and economic think tanks, which call for deregulation as main policy strategy and then expect market forces to boost growth quickly and without specific policy measures.

Originality/value

The attempt to assess the relative impact of the three policy areas is specific to this paper; most other papers focus on one policy area only.

Details

Journal of Economic Studies, vol. 32 no. 6
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 2 November 2015

Ali Fakih and Pascal L. Ghazalian

Labour market constraints constitute prominent obstacles to firm development and economic growth of countries located in the Middle East and North Africa (MENA) region. The

Abstract

Purpose

Labour market constraints constitute prominent obstacles to firm development and economic growth of countries located in the Middle East and North Africa (MENA) region. The purpose of this paper is to examine the implications of firm characteristics, national locations, and sectoral associations for the perceptions of firms concerning two basic labour market constraints: labour regulations and labour skill shortages.

Design/methodology/approach

The empirical analysis is carried out using firm-level data set sourced from the World Bank’s Enterprise Surveys database. A bivariate probit estimator is used to account for potential correlations between the errors in the two labour market constraints’ equations. The authors implement overall estimations and comparative cross-country and cross-sector analyses, and use alternative estimation models.

Findings

The empirical results reveal some important implications of firm characteristics (e.g. firm size, labour compositions) for firm perceptions of labour regulations and labour skill shortages. They also delineate important cross-country and cross-sector variations. The authors also find significant heterogeneity in the factors’ implications for the perceptions of firms belonging to different sectors and located in different MENA countries.

Originality/value

Reforms in labour regulations and investment in human capital are important governmental policy interventions for promoting firm development and economic growth in the MENA region. This paper contributes to the empirical literature by analysing the factors influencing the perceptions of firms located in the MENA region concerning labour regulations and labour skill shortages. It provides policy-makers with information needed in the design of labour policies that attenuate the impacts of labour market constraints and enhance the performance of firms and the long-run economic growth.

Details

International Journal of Manpower, vol. 36 no. 8
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 30 November 2021

Priyaranjan Jha and Rana Hasan

The purpose of this paper is to understand labor market regulations and their consequences for the allocation of resources.

Abstract

Purpose

The purpose of this paper is to understand labor market regulations and their consequences for the allocation of resources.

Design/methodology/approach

This paper constructs a theoretical model to study labor market regulations in developing countries and how it affects the allocation of resources between the less productive informal activities and more productive formal activities. It also provides empirical support for some theoretical results using cross-country data.

Findings

When workers are risk-averse and the market for insurance against labor income risk is missing, regulations that provide insurance to workers (such as severance payments) reduce misallocation. However, regulations that simply create barriers to the dismissal of workers increase misallocation and end up reducing the welfare of workers. This study also provides some empirical evidence broadly consistent with the theoretical results using cross-country data. While dismissal regulations increase the share of informal employment, severance payments to workers do not.

Research limitations/implications

The empirical exercise is constrained by the lack of availability of good data on the informal sector.

Originality/value

The analysis of the alternative labor market regulations analyzed in this paper in the presence of risk-averse workers is an original contribution to the literature.

Details

Indian Growth and Development Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8254

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Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

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55446

Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

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Article
Publication date: 1 September 2000

Jonathan C. Morris

Looks at the 2000 Employment Research Unit Annual Conference held at the University of Cardiff in Wales on 6/7 September 2000. Spotlights the 76 or so presentations within…

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28384

Abstract

Looks at the 2000 Employment Research Unit Annual Conference held at the University of Cardiff in Wales on 6/7 September 2000. Spotlights the 76 or so presentations within and shows that these are in many, differing, areas across management research from: retail finance; precarious jobs and decisions; methodological lessons from feminism; call centre experience and disability discrimination. These and all points east and west are covered and laid out in a simple, abstract style, including, where applicable, references, endnotes and bibliography in an easy‐to‐follow manner. Summarizes each paper and also gives conclusions where needed, in a comfortable modern format.

Details

Management Research News, vol. 23 no. 9/10/11
Type: Research Article
ISSN: 0140-9174

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Article
Publication date: 1 January 1978

The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the

Abstract

The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act (which has been amended by the Sex Discrimination Act 1975) provides:

Details

Managerial Law, vol. 21 no. 1
Type: Research Article
ISSN: 0309-0558

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Article
Publication date: 8 November 2013

Rana Hasan, Devashish Mitra and Asha Sundaram

This study aims to focus on the role of labor regulation and credit market imperfections, in addition to that of factor endowments, in determining capital intensities in…

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1024

Abstract

Purpose

This study aims to focus on the role of labor regulation and credit market imperfections, in addition to that of factor endowments, in determining capital intensities in Indian manufacturing.

Design/methodology/approach

The paper considers an alternative approach to identifying the effects of India ' s labor regulations on industrial performance. In particular, the paper uses a measure of the stringency of labor regulations across countries – one that is completely independent of the India-specific measures used by earlier studies – and examines its relationship with capital intensities across manufacturing industries. Additionally, since labor regulations are unlikely to be the only reason for imperfections in factor markets, the paper also examines whether and to what extent capital market imperfections affect capital intensities across manufacturing industries. The paper then presents a case study that seeks to ascertain whether actual capital intensities prevailing in Indian manufacturing in major industry groups from 1989 to 1996 were larger than predicted capital intensities for these industry groups based on relative factor demand functions estimated for the USA (a country with relatively less restrictive labor laws and a more developed financial system) evaluated at Indian wages. Finally, the paper uses a recently available dataset to compare capital intensities in Indian and Chinese manufacturing to investigate the behavior of these two emerging Asian economies since 1980, when they started out with relatively similar socio-economic conditions.

Findings

The paper finds that India uses more capital-intensive techniques of production in manufacturing than countries at similar levels of development (and similar factor endowments), including China. For a majority of manufacturing industries, labor freedom and capital market development are, in addition to factor endowments, important determinants of capital intensity of production techniques used. Results reveal that, controlling for factor prices, India specializes in more capital-intensive varieties within broad industry groups relative to the USA, a more capital-abundant economy.

Originality/value

To the best of the authors ' knowledge, such a study has not been done for any other country. The paper sheds light on the important issue regarding the use of capital-intensive techniques in manufacturing in India, which is a labor-abundant country. The role of labor regulation has been extensively debated and the paper also investigates its role along with the role played by credit market imperfections.

Details

Indian Growth and Development Review, vol. 6 no. 2
Type: Research Article
ISSN: 1753-8254

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Article
Publication date: 1 March 1985

Tomas Riha

Nobody concerned with political economy can neglect the history of economic doctrines. Structural changes in the economy and society influence economic thinking and…

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1324

Abstract

Nobody concerned with political economy can neglect the history of economic doctrines. Structural changes in the economy and society influence economic thinking and, conversely, innovative thought structures and attitudes have almost always forced economic institutions and modes of behaviour to adjust. We learn from the history of economic doctrines how a particular theory emerged and whether, and in which environment, it could take root. We can see how a school evolves out of a common methodological perception and similar techniques of analysis, and how it has to establish itself. The interaction between unresolved problems on the one hand, and the search for better solutions or explanations on the other, leads to a change in paradigma and to the formation of new lines of reasoning. As long as the real world is subject to progress and change scientific search for explanation must out of necessity continue.

Details

International Journal of Social Economics, vol. 12 no. 3/4/5
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 13 September 2011

FangLee Cooke

The purpose of this paper is to chart the sharp rise of informal employment in urban China in the last decade. It investigates the role of labour market regulations in…

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1409

Abstract

Purpose

The purpose of this paper is to chart the sharp rise of informal employment in urban China in the last decade. It investigates the role of labour market regulations in shaping employment relations for those engaged in this form of employment and their employment outcome. It also examines various forms of organization and representation of these workers and the extent to which these mechanisms meet their needs.

Design/methodology/approach

This paper draws on secondary and first‐hand empirical data. The secondary data come mainly from media sources and academic publications in China. The empirical data from interviews that the author has conducted with the labour authorities, trade union officials, workers, senior managers and owner CEOs of private firms in several cities.

Findings

The paper concludes that the inadequacy of the function of employment agencies, the absence of a functioning social security system for workers in informal employment, and the lack of effective enforcement of employment‐related regulations mean that the majority of the growing force of workers in this category will continue to be under‐protected and disadvantaged.

Research limitations/implications

This paper draws information from secondary data and a small number of interviews with key stakeholders in employment relations. Future research should conduct a larger study focusing on the views and experience of workers in the informal sector.

Practical implications

This study reveals some skills gaps and training needs for trade union officials. It also brings to the policy makers' attention some loopholes in the labour regulations and their implementation.

Social implications

The paper argues that providing decent employment conditions and work environment remains a key challenge to all concerned but is crucial to the well‐being of workers and their families.

Originality/value

The paper examines the efficacy of labour regulations in protecting workers in the informal sector in China by investigating the roles of different institutional actors. It adopts a relational and institutional approach to study the issue.

Details

Journal of Chinese Human Resources Management, vol. 2 no. 2
Type: Research Article
ISSN: 2040-8005

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Article
Publication date: 16 February 2021

Elena Bárcena-Martín, Samuel Medina-Claros and Salvador Pérez-Moreno

Institutional environment plays a crucial role in determining the nature of entrepreneurship that prevails in an economy. In this paper, the authors address how business…

Abstract

Purpose

Institutional environment plays a crucial role in determining the nature of entrepreneurship that prevails in an economy. In this paper, the authors address how business, labour and credit regulations contribute differently to both the overall prevalence of opportunity-driven entrepreneurship (ODE) and its gender gap in high-income and emerging economies.

Design/methodology/approach

On the basis of an unbalanced panel of 41 countries over the period 2005–2016, the authors estimate system generalised method of moment models. The authors also perform an ordinary least square analysis to address gender differences in ODE.

Findings

The authors find that higher credit market liberalisation is especially associated with more entrepreneurship by opportunity. Nevertheless, while credit market regulation stands out as a key element to promote opportunity-based entrepreneurship in both high-income and emerging countries, in the emerging world business regulation is also largely related to the prevalence of opportunity entrepreneurship. In terms of gender gap, business and labour market freedom seem to exert an equalising effect on the divide in entrepreneurship by opportunity, specifically in emerging economies.

Originality/value

Findings allow the identification of regulatory policy reform priorities to enhance the prevalence of ODE depending on the level of a country's development. They also identify which specific areas of economic regulation would speed up closing the gender gap in opportunity entrepreneurship.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 27 no. 5
Type: Research Article
ISSN: 1355-2554

Keywords

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