Human resource management and labour demand dynamics in Belgium : A microeconometric analysis using employers' matched data

Purpose – This paper aims to estimate whether human resource (HR) practices influence labour demand dynamics behaviour. Design/methodology/approach – Groups practices in terms of employees satisfaction and work organisation, financial incentives and individual's career perspectives, and explains how they may influence labour productivity and cost. Considering five HR variables, estimates two specifications of labour demand dynamics, under production constrained by demand or monopolistic competition regimes. Applies the two‐step GMM estimator proposed by Blundell and Bond to a balanced panel of 452 Belgian firms observed during the period 1998‐2002. Findings – In the complete monopolistic competition specification, estimates a positive one lag relation explaining labour demand by average training hours combined with an indicator of well‐being of workers, the fact that they are engaged in long term contracts and stay in firms. Some evidence therefore seems to show that some combined HR practices can improve labour demand. Originality/value – Provides information on whether HR practices influence labour demand dynamics in a Belgian context.