Defensive innovations in developed countries can explain the empirical phenomenon that openness towards trade with less-developed countries does not necessarily induce a substantial increase in the wage differential and trade volumes. Building on step-by-step innovations as introduced by Aghion...

This paper introduces a second, vertically related industry into the usual one-industry oligopoly framework of cooperative R&D investment between firms operating on the same product market. R&D efforts are affected by intra- and inter-industry R&D spillovers. Horizontal and vertical R&D...

The theoretical discussion concerning the question whether the incumbent or the (potential) entrant invests more into R&D has attracted considerable interest. This paper reports the results of an empirical study on this question using data of about 3500 German firms over the years 1992 to 1995....

New macro empirical evidence is provided to assess the relative importance of object and idea gaps in explaining the world income distribution dynamics over a benchmark period 1960-1985. Results are then extended through 1995. Formal statistical hypothesis tests allow us to discriminate between...

We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation. in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to...

Flexibility in the labour market is important for macroeconomic stability. The Danish labour market has been highlighted as being flexible, which this study confirms using micro data from 1980 to the present. Unemployment insured workers are found to be less geographical job mobile than workers...

We evaluate the quantity-quality trade-off on the labor market by estimating an augmented matching function weighting the matches by quality measures. We use the approach to evaluate the German labor market reforms conducted between 2003 and 2005. Indeed, we find a significant quantity-quality...

In 2012, a labour market reform in Italy known as the Fornero Law substantially reduced firing restrictions for open-ended contracts in the case of firms with more than 15 employees. The results from a difference in regression discontinuities design that compares firms below versus those above...

We introduce a new data set on hiring and firing restrictions for 21 OECD countries for the period 1984-90. The data are based on surveys of business people in the countries covered, so the indices we use are subjective in nature. Controlling for country and time fixed effects, and using dynamic...

In 2012 a labour market reform, known as Fornero Law, substantially reduced firing restrictions for firms with more than 15 employees in Italy. The results from a difference in regression discontinuities design that compares firms below versus those above the cut-off before and after the reform...