In the last decades, work flexibility emerged as a key requirement firms must meet to face volatile markets and highly differentiated product demand. This paper compares two alternative approaches to strengthen work flexibility: internal flexibility, i.e. practices that focus on the employees’ ability to perform a variety of highly qualified tasks in a context of stable employment relationships; and external flexibility, i.e. practices that align employment and labour costs to demand fluctuations using a buffer of non-standard employees involved in routine tasks. We empirically verify whether both practices are able to boost sales growth using a linked employer-employee panel of manufacturing firms from the Emilia-Romagna region (Italy). While internal flexibility positively affects firm growth, external flexibility is at best not significant, and in some empirical specifications it appears to hamper firm growth. Such a negative effect, however, decreases when we limit the analysis to industries with high demand volatility and cost-based competition. The related managerial and policy implications are discussed.

Work Flexibility and Firm Growth: Evidence from LEED Data on the Emilia-Romagna Region / Arrighetti, Alessandro; Landini, Fabio; Lasagni, Andrea; Cattani, Luca. - In: INDUSTRIAL AND CORPORATE CHANGE. - ISSN 0960-6491. - (2021).

Work Flexibility and Firm Growth: Evidence from LEED Data on the Emilia-Romagna Region

Arrighetti Alessandro;Landini Fabio;Lasagni Andrea;
2021

Abstract

In the last decades, work flexibility emerged as a key requirement firms must meet to face volatile markets and highly differentiated product demand. This paper compares two alternative approaches to strengthen work flexibility: internal flexibility, i.e. practices that focus on the employees’ ability to perform a variety of highly qualified tasks in a context of stable employment relationships; and external flexibility, i.e. practices that align employment and labour costs to demand fluctuations using a buffer of non-standard employees involved in routine tasks. We empirically verify whether both practices are able to boost sales growth using a linked employer-employee panel of manufacturing firms from the Emilia-Romagna region (Italy). While internal flexibility positively affects firm growth, external flexibility is at best not significant, and in some empirical specifications it appears to hamper firm growth. Such a negative effect, however, decreases when we limit the analysis to industries with high demand volatility and cost-based competition. The related managerial and policy implications are discussed.
Work Flexibility and Firm Growth: Evidence from LEED Data on the Emilia-Romagna Region / Arrighetti, Alessandro; Landini, Fabio; Lasagni, Andrea; Cattani, Luca. - In: INDUSTRIAL AND CORPORATE CHANGE. - ISSN 0960-6491. - (2021).
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11381/2890759
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