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Institutions and Structural Unemployment: Do Capital-Market Imperfections Matter? CES Germany & Europe Working Papers, No. 00.8, December 2000

Fehn, Rainer and Belke, Ansgar (2000) Institutions and Structural Unemployment: Do Capital-Market Imperfections Matter? CES Germany & Europe Working Papers, No. 00.8, December 2000. [Working Paper]

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    Abstract

    This paper analyzes whether differences in institutional structures on capital markets contribute to explaining why some DECO-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 DECO-countries. It is argued that the often-blamed labor 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 labor-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
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > employment/labour market > employment/unemployment
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Harvard University, Center for European Studies > Program for the Study of Germany and European Working Papers Series
    Depositing User: Unnamed user with email kms214@pitt.edu
    Official EU Document: No
    Language: English
    Date Deposited: 22 Apr 2015 16:29
    Number of Pages: 50
    Last Modified: 05 Aug 2015 15:34
    URI: http://aei.pitt.edu/id/eprint/63705

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