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Board‐Level Employee Representation (BLER) and Firms’ Responses to Crisis

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  • Aleksandra Gregorič
  • Marc Steffen Rapp

Abstract

Short: We hypothesize that companies with board‐level employee representation (BLER) experience a lower probability of crisis‐induced dismissals than other firms. Theoretically, we link this effect to the employee directors’ ability to reduce the information asymmetry and moral hazard in employee–employer contracting, thereby facilitating the implementation of labor‐cost adjustments that are an alternative to workforce dismissals. We confirm our hypotheses by analyzing the behavior of Scandinavian public corporations with/without employee directors during the Great Recession.

Suggested Citation

  • Aleksandra Gregorič & Marc Steffen Rapp, 2019. "Board‐Level Employee Representation (BLER) and Firms’ Responses to Crisis," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(3), pages 376-422, July.
    • Handle: RePEc:bla:indres:v:58:y:2019:i:3:p:376-422
    DOI: 10.1111/irel.12241
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    1. Burdin, Gabriel & Pérotin, Virginie, 2019. "Employee representation and flexible working time," Labour Economics, Elsevier, vol. 61(C).

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