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Institutions and Structural Unemployment: Do Capital Market Imperfections Matter? CEPS Working Document No. 158, November 2000

Belke, Ansgar and Fehn, Rainer. (2000) Institutions and Structural Unemployment: Do Capital Market Imperfections Matter? CEPS Working Document No. 158, November 2000. [Working Paper]

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    Abstract

    This paper analyses whether differences in institutional structures on capital markets contribute to explaining why some OECD-countries, in particular the Anglo-Saxon countries, have been much more successful over the last two decades in producing employment growth and in reducing unemployment than most continental-European OECD-countries. It is argued that the often-blamed labour market rigidities alone, while important, do not provide a satisfactory explanation for these differences across countries and over time. Financial constraints are potentially important obstacles against creating new firms and jobs and thus against coping well with structural change and against moving successfully toward the “new economy”. Highly developed venture capital markets should help to alleviate such financial constraints. This view that labour-market institutions should be supplemented by capital market imperfections for explaining differences in employment performances is supported by our panel data analysis, in which venture capital turns out to be a significant institutional variable.

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    Item Type: Working Paper
    Uncontrolled Keywords: Labour markets; unemployment; new economy; panel analysis; venture capital.
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > Single Market > capital, goods, services, workers
    EU policies and themes > Policies & related activities > employment/labour market > employment/unemployment
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Working Documents
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 11 Nov 2009
    Page Range: p. 50
    Last Modified: 15 Feb 2011 18:16
    URI: http://aei.pitt.edu/id/eprint/11685

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