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Flexible labor and innovation in the Italian industrial sector

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  • Francesco Franceschi
  • Vincenzo Mariani

Abstract

We study how labor flexibility within firms affects innovation. Using data from the Bank of Italy and information on patent applications, we find that innovation falls when firms increase the share of temporary workers. The effect of interest is identified through policy changes that modified the relative cost of temporary employment. Reforms introduced since the end of the 1990s that have reduced cost and protection of temporary workers may have been a determinant of the low innovation of Italian firms.

Suggested Citation

  • Francesco Franceschi & Vincenzo Mariani, 2016. "Flexible labor and innovation in the Italian industrial sector," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(4), pages 633-648.
    • Handle: RePEc:oup:indcch:v:25:y:2016:i:4:p:633-648.
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    File URL: http://hdl.handle.net/10.1093/icc/dtv044
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    Cited by:

    1. Canale, Rosaria Rita & Liotti, Giorgio & Musella, Marco, 2022. "Labour market flexibility and workers’ living conditions in Europe," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 441-450.
    2. Martínez-Sánchez, Angel & Vicente-Oliva, Silvia & Pérez-Pérez, Manuela, 2020. "The relationship between R&D, the absorptive capacity of knowledge, human resource flexibility and innovation: Mediator effects on industrial firms," Journal of Business Research, Elsevier, vol. 118(C), pages 431-440.
    3. Belloc, Filippo, 2019. "Institutional complementarities between labour laws and innovation," Journal of Institutional Economics, Cambridge University Press, vol. 15(2), pages 235-258, April.
    4. Richard Duhautois & Christine Erhel & Mathilde Guergoat-Larivière & Malo Mofakhami, 2022. "More and Better Jobs, But Not for Everyone: Effects of Innovation in French Firms," ILR Review, Cornell University, ILR School, vol. 75(1), pages 90-116, January.
    5. Limin Gao & Sajid Anwar, 2024. "Labour market rigidity and firm innovation," Australian Economic Papers, Wiley Blackwell, vol. 63(2), pages 237-257, June.
    6. Chengde You & Huishan Qiu & Zhuojie Pi & Mengyuan Yu, 2023. "Sustainable Enterprise Development in the Manufacturing Sector: Flexible Employment and Innovation in China," Sustainability, MDPI, vol. 15(10), pages 1-30, May.
    7. Ruesga Benito, Santos & Heredero de Pablos, María Isabel & Da Silva Bichara, Julimar & Pérez Ortiz, Laura & Viñas Apaolaza, Ana, 2019. "Internal flexibility and collective bargaining in the European Union during the Great Recession: An analysis at the establishment level," Economics Discussion Papers 2019-61, Kiel Institute for the World Economy (IfW Kiel).

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