International Competitiveness, Job Creation and Job Destruction - An Establishment Level Study of German Job Flows

44 Pages Posted: 10 Jun 2008

See all articles by Christoph Moser

Christoph Moser

Johannes Gutenberg University Mainz - Faculty of Law and Economics

Dieter M. Urban

Johannes Gutenberg University of Mainz - Institute for International Economic Theory; CESifo (Center for Economic Studies and Ifo Institute)

Beatrice Weder di Mauro

Graduate Institute Geneva, IHEID; Graduate Institute Geneva, IHEID

Date Written: March 1, 2008

Abstract

This study investigates the impact of international competitiveness on net employment, job creation, job destruction, and gross job flows for a representative sample of German establishments from 1993 to 2005. We find a statistically significant but economically small effect of real exchange rate shocks on employment, comparable to the one found in studies for the United States. However, contrary to the United States, the employment adjustment (among surviving firms) operates mainly through the job creation rather than the job destruction rate. Job destruction occurs essentially through discrete events such as restructuring, outsourcing and bankruptcy. We suggest that these findings are consistent with a highly regulated labour market, in which smooth adjustment is costly and possibly delayed.

Keywords: attrition estimator, gross worker flows, international competitiveness, inverse probability weighted GMM, real exchange rate

JEL Classification: F16, F40

Suggested Citation

Moser, Christoph and Urban, Dieter M. and Weder di Mauro, Beatrice and Weder di Mauro, Beatrice, International Competitiveness, Job Creation and Job Destruction - An Establishment Level Study of German Job Flows (March 1, 2008). CEPR Discussion Paper No. DP6745, Available at SSRN: https://ssrn.com/abstract=1141651

Christoph Moser (Contact Author)

Johannes Gutenberg University Mainz - Faculty of Law and Economics ( email )

Chair of Corporate Finance
D-55099 Mainz, 55128
Germany

Dieter M. Urban

Johannes Gutenberg University of Mainz - Institute for International Economic Theory ( email )

D 55099 Mainz
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Beatrice Weder di Mauro

Graduate Institute Geneva, IHEID ( email )

Chemin Eugene Rigot 2
Geneva, 1211
Switzerland

Graduate Institute Geneva, IHEID ( email )

Geneva Avenue de la Paix 11A
Geneva, 1202
Switzerland
1211 (Fax)

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