The Effects of Employment Protection Legislation and Financial Market Imperfections on Investment : Evidence from a Firm-Level Panel of EU Countries
Exploiting information from a panel of European firms we study the joint effect of EPL and financial market imperfections on investment, capital-labour substitution, labour productivity and job reallocation. We find that EPL reduces investment per worker, capital per worker and value added per worke...
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| Format: | Journal Article |
| Language: | EN |
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2012
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| Online Access: | http://hdl.handle.net/10986/5206 |
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okr-10986-52062021-04-23T14:02:21Z The Effects of Employment Protection Legislation and Financial Market Imperfections on Investment : Evidence from a Firm-Level Panel of EU Countries Cingano, F. Leonardi, M. Messina, J. Pica, G. Exploiting information from a panel of European firms we study the joint effect of EPL and financial market imperfections on investment, capital-labour substitution, labour productivity and job reallocation. We find that EPL reduces investment per worker, capital per worker and value added per worker in high reallocation sectors relative to low reallocation sectors, while increasing the average frequency at which firms adjust their capital stock. The reduction in capital per worker and value added per worker is less pronounced in financially sound firms. Also, the propensity to invest appears to increase only in firms that are likely to be financially unconstrained. Overall, poor access to credit markets seems to exacerbate the negative effects of EPL on capital deepening and productivity. -Federico Cingano, Marco Leonardi, Julian Messina and Giovanni Pica. 2012-03-30T07:31:47Z 2012-03-30T07:31:47Z 2010 Journal Article Economic Policy 0266-4658 http://hdl.handle.net/10986/5206 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article Europe |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
EN |
| geographic_facet |
Europe |
| relation |
http://creativecommons.org/licenses/by-nc-nd/3.0/igo |
| description |
Exploiting information from a panel of European firms we study the joint effect of EPL and financial market imperfections on investment, capital-labour substitution, labour productivity and job reallocation. We find that EPL reduces investment per worker, capital per worker and value added per worker in high reallocation sectors relative to low reallocation sectors, while increasing the average frequency at which firms adjust their capital stock. The reduction in capital per worker and value added per worker is less pronounced in financially sound firms. Also, the propensity to invest appears to increase only in firms that are likely to be financially unconstrained. Overall, poor access to credit markets seems to exacerbate the negative effects of EPL on capital deepening and productivity. -Federico Cingano, Marco Leonardi, Julian Messina and Giovanni Pica. |
| format |
Journal Article |
| author |
Cingano, F. Leonardi, M. Messina, J. Pica, G. |
| spellingShingle |
Cingano, F. Leonardi, M. Messina, J. Pica, G. The Effects of Employment Protection Legislation and Financial Market Imperfections on Investment : Evidence from a Firm-Level Panel of EU Countries |
| author_facet |
Cingano, F. Leonardi, M. Messina, J. Pica, G. |
| author_sort |
Cingano, F. |
| title |
The Effects of Employment Protection Legislation and Financial Market Imperfections on Investment : Evidence from a Firm-Level Panel of EU Countries |
| title_short |
The Effects of Employment Protection Legislation and Financial Market Imperfections on Investment : Evidence from a Firm-Level Panel of EU Countries |
| title_full |
The Effects of Employment Protection Legislation and Financial Market Imperfections on Investment : Evidence from a Firm-Level Panel of EU Countries |
| title_fullStr |
The Effects of Employment Protection Legislation and Financial Market Imperfections on Investment : Evidence from a Firm-Level Panel of EU Countries |
| title_full_unstemmed |
The Effects of Employment Protection Legislation and Financial Market Imperfections on Investment : Evidence from a Firm-Level Panel of EU Countries |
| title_sort |
effects of employment protection legislation and financial market imperfections on investment : evidence from a firm-level panel of eu countries |
| publishDate |
2012 |
| url |
http://hdl.handle.net/10986/5206 |
| _version_ |
1764394310825934848 |