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Codetermination, R&D, and Employment

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  • Luis M. Granero

Abstract

We examine whether the German system of codetermination affects output, industrial employment, and R&D when firm asymmetry relies on different governance structures due to codetermination. Under a decision-making process shaped by utilitarian management, an intermediate degree of codetermination enables the codetermined firm to produce more output, hire more labor, and undertake more R&D activities, but this is not ensured for any degree of codetermination. This contrasts with situations where codetermination goes forward through bargaining between shareholders and workers, where the codetermined firm is able to produce more output, hiring more labor, and undertaking more R&D investments.

Suggested Citation

  • Luis M. Granero, 2006. "Codetermination, R&D, and Employment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(2), pages 309-328, June.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200606)162:2_309:crae_2.0.tx_2-y
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    References listed on IDEAS

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    Cited by:

    1. Kornelius Kraft & Jörg Stank & Ralf Dewenter, 2011. "Co-determination and innovation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(1), pages 145-172.
    2. John T. Addison & Claus Schnabel, 2011. "Worker Directors: A German Product that Did Not Export?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(2), pages 354-374, April.
    3. Fanti, Luciano & Gori, Luca & Sodini, Mauro, 2018. "Codetermination and product differentiation," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 390-403.

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    More about this item

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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