Final answer:
Firms tend to use temporary workers in countries with stringent employee termination laws to maintain flexibility and avoid the extensive costs associated with firing and layoff regulations.
Step-by-step explanation:
The statement that firms are more likely to use temporary workers in countries where laws regulating employee termination are more restrictive is true. In countries like France, where the labor code imposes significant hurdles and costs for companies when they try to fire or lay off workers, employers tend to be cautious about long-term hiring. Many European countries like Spain, Germany, Denmark, and Belgium require months of notice before an employee can be laid off and mandate substantial severance or retraining packages which can discourage firing. Therefore, companies in such countries are hesitant to hire permanent staff and instead opt for temporary workers to maintain flexibility in their workforce.