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Firm strategies and distributional dynamics: labour share in Italian medium-large firms

Author

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  • Francesco Bloise

    (Roma Tre University)

  • Irene Brunetti

    (National Institute for Public Policy Analysis, INAPP)

  • Valeria Cirillo

    (University of Bari Aldo Moro
    Institute of Economics, Scuola Superiore Sant’Anna)

Abstract

Using an original database on medium and large Italian firms built by merging the Rilevazione Imprese e Lavoro run by INAPP in 2010 and 2015 with the AIDA archive by Bureau Van Dijk, we show that the trend of the labour share differs along the labour share distribution. We carry out Unconditional Quantile Regression decompositions to explore the main drivers behind this heterogeneity. Thus, we contribute to the literature on the dynamics of the labour share since we investigate phenomena which cannot be observed through a macro perspective or by looking at a single parameter of the labour share distribution. After including in our specifications several firm-level characteristics and considering composition effects, we find that outsourcing is the main factor which plays a role in reducing the labour share along the distribution. Further different mechanisms act in the various parts of the distribution: unionization contributes to increase the labour share at the top of the labour share distribution, while the introduction of some forms of product (process) innovations is associated with a negative (positive) change in the labour share for those firms at the bottom of the labour share distribution.

Suggested Citation

  • Francesco Bloise & Irene Brunetti & Valeria Cirillo, 2022. "Firm strategies and distributional dynamics: labour share in Italian medium-large firms," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(2), pages 623-655, July.
    • Handle: RePEc:spr:epolit:v:39:y:2022:i:2:d:10.1007_s40888-020-00213-5
    DOI: 10.1007/s40888-020-00213-5
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    More about this item

    Keywords

    Labour share; Unconditional quantile regression; Firm-level studies; Influence function; Decomposition methods;
    All these keywords.

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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