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This paper shows that the liberalisation of foreign direct investment (FDI) tends to make the effect of labour costs on domestic investment and labour demand more negative. Using data from Germany, it then provides evidence that is consistent with this view. First, high unit labour costs...
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market conditions change, tenure-based contracts may cease to be optimal …
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volatile firms, where jobs are otherwise viable under regular contracts, reduces welfare and likely explains negative employee …
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creation, substitution effects - some jobs that are otherwise viable under regular contracts are advertised as ZHCs - are …
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