Success belongs to the flexible firm: How labor flexibility can retain firm innovativeness in times of downsizing

Downsizing is known to harm innovation in developed countries. In developing countries, however, the impact of downsizing on innovation remains unclear. In addition, little is known about overcoming potentially related innovation obstacles. We close this research gap with a study across nine developing countries in Africa and South Asia. We put forward that labor flexibility (numerical, functional, and wage and reward flexibility) mitigates the...