Sales volatility and labour market rigidity
Some of the results pertaining to the impact on exports related to differences in labour market rigidities are statistically insignificant or counterintuitive. For example, estimations performed jointly for all policy areas do not yield significant results which may be related to the correlation of labour market indicators with other variables. The individual estimations yield correctly signed and consistently statistically significant results on protection to standard employment contract, cost of increasing the number of hours worked and statutory power and protection of unions having significantly negative effect on exports in industries characterised by relatively high levels of sales volatility. For example, one standard deviation increase in the indicator measuring protection of a standard employment contract would result in 3% decrease in exports. Such a change would be an equivalent of aligning regulations on protection of standard contract in Slovakia (average minus one standard deviation) to that in Hungary (approximately average) or of aligning protection of standard contract in Hungary with that of Finland (average plus one standard deviation). A one standard deviation increase in the indicator measuring cost of increasing the number of hours worked would result in 5% decrease in exports. This would be equivalent to increase the 2005 costs of increasing extra hours from those observed in the United Kingdom to those observed in Indonesia.