Enterprise Formation and Labor Market Institutions

21 Pages Posted: 8 Aug 2001

See all articles by Vesa Kanniainen

Vesa Kanniainen

University of Helsinki - Department of Political and Economic Studies; CESifo (Center for Economic Studies and Ifo Institute)

Timo Vesala

University of Helsinki - Department of Political and Economic Studies

Date Written: November 2000

Abstract

The paper introduces a model of enterprise formation in a unionized economy with labor protection and wage bargaining. Enterprise formation is subject to future market risk and is shaped by labor market institutions in the post-entry stage. The predictions of the model are tested in cross-section OECD data on 19 economies over 1978-98. Support is found for the view that enterprise formation is adversely affected by economic risks, unemployment compensation, union power, and labor protection variables.

Keywords: Entrepreneurship, labor protection, labor unions

JEL Classification: M13, J23, J24, J51

Suggested Citation

Kanniainen, Vesa and Vesala, Timo, Enterprise Formation and Labor Market Institutions (November 2000). Available at SSRN: https://ssrn.com/abstract=259809 or http://dx.doi.org/10.2139/ssrn.259809

Vesa Kanniainen (Contact Author)

University of Helsinki - Department of Political and Economic Studies ( email )

P.O. Box 54
FIN-00014 Helsinki
Finland
+358-0-9-1911 (Phone)
+358-0-191-8877 (Fax)

HOME PAGE: http://www.cesifo.de

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Timo Vesala

University of Helsinki - Department of Political and Economic Studies ( email )

P.O. Box 54
FIN-00014 Helsinki
Finland

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