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Uncertainty, Flexible Labour Relations and R&D
Author(s) -
Di Cintio Marco,
Grassi Emanuele
Publication year - 2017
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12127
Subject(s) - flexibility (engineering) , workforce , economics , product market , product (mathematics) , labour economics , microeconomics , management , mathematics , economic growth , incentive , geometry
This paper examines the effects of uncertainty and flexible labour contracts on the Research and Development (R&D) intensity. Using a panel of Italian manufacturing firms, we find a hump‐shaped relationship between workforce flexibility and R&D intensity. Moreover, as predicted by the real options theory, our results suggest that product market uncertainty reduces R&D efforts and that flexible labour contracts countervail the adverse effect of uncertainty on R&D.