TY  - RPRT
        AU  - Polder, Michael
AU  - Verick, Sher
        TI  - Dynamics of Labour and Capital Adjustment – A Comparison of Germany and the Netherlands
        PY  - 2004/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1212
        UR  - https://www.iza.org/index.php/publications/dp1212
        AB  - In this paper we investigate the dynamic adjustment of labour and capital in German and Dutch firms. The Dutch labour market is characterised by greater flexibility in wages and work arrangements in comparison to Germany. These institutional differences imply that employment dynamics in the two countries should differ, and in particular, labour adjustment in the Netherlands should be more responsive to economic changes. On the other hand, there is unlikely to be such a divergence in capital dynamics as investment conditions are similar. Our results are consistent with this hypothesis. Furthermore, there is no evidence that labour market regulations in the two countries affect the dynamics of capital adjustment.
        KW  - investment
KW  - labour demand
KW  - interrelation
KW  - panel data
KW  - GMM
        ER  -