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Enterprise unions and downsizing in Japan before and after 1997

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  • Noda, Tomohiko
  • Hirano, Daisuke
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    Abstract

    The purpose of this paper is to examine whether enterprise unions in Japan have changed their attitude toward downsizing before and after 1997. Our empirical analysis reveals that the attitudes of enterprise unions toward downsizing have changed since 1997. Before 1997, firms with strong unions, i.e., those affiliated with the federation, were likely to maintain employment until firms experienced two consecutive years of losses/deficits. However, after 1997, these firms tended to implement downsizing actions before they suffered deficits. These results suggest that the changes in the stances of the unions brought about changes in employment adjustment behaviors. The change in unions’ attitudes after 1997 is interpreted as being caused by the “no-layoff policy,” which was strongly associated with priority on job security over profitability. Moreover, downsizing was implemented with the consent of union members, and the cooperative relationship between unions and the management was maintained.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

    Volume (Year): 28 (2013)
    Issue (Month): C ()
    Pages: 91-118

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    Handle: RePEc:eee:jjieco:v:28:y:2013:i:c:p:91-118

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    Web page: http://www.elsevier.com/locate/inca/622903

    Related research

    Keywords: Employment adjustments; Corporate governance; Enterprise unions; Downsizing;

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    References

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    Cited by:
    1. Sebastien Lechevalier & Cyrille Dossougoin & Christophe Hurlin & Satoko Takaoka, 2014. "How did the Japanese Employment System Change?Investigating the Heterogeneity of Downsizing Practices across Firms," KIER Working Papers, Kyoto University, Institute of Economic Research 883, Kyoto University, Institute of Economic Research.

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