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Churning and Labor Productivity in Economic Crisis, Differences between Foreign and Domestic Firms

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  • Liis Roosaar
  • Urmas Varblane
  • Jaan Masso

Abstract

Our analysis of matched employee-employer data from Estonian firms (years 2006–2013) shows that an increase in labor churning is related to a positive change in labor productivity during an economic crisis. During boom years, churning is related to a negative change in labor productivity. Only in services during the crisis did foreign firms have a stronger positive relationship between labor churning and labor productivity changes than domestic firms. However, our analysis at the individual level does not confirm that, during a crisis, foreign firms in services hire more employees with characteristics that have been found to be related to productivity increases.

Suggested Citation

  • Liis Roosaar & Urmas Varblane & Jaan Masso, 2022. "Churning and Labor Productivity in Economic Crisis, Differences between Foreign and Domestic Firms," Eastern European Economics, Taylor & Francis Journals, vol. 60(2), pages 113-148, March.
  • Handle: RePEc:mes:eaeuec:v:60:y:2022:i:2:p:113-148
    DOI: 10.1080/00128775.2021.1971540
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    Cited by:

    1. Gaygysyz Ashyrov & Nicolas Gavoille & Kjetil Haukås & Rasmus Bøgh Holmen & Jaan Masso, 2024. "Foreign Ownership And Productivity: A Comparative Study Of Estonia, Latvia And Norway," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 148, Faculty of Economics and Business Administration, University of Tartu (Estonia).

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