Temporary Agency Work and Firm Performance: Evidence from German Establishment-Level Panel Data
AbstractThis paper empirically examines the impact of temporary agency work on firm performance using panel data from German establishments. Thereby, special attention is devoted to the question, whether there are performance differences between firms using temporary agency workers (TAWs) as a buffer stock (flexibility strategy) and firms using TAWs for screening purposes (screening strategy). While the theoretical discussion on this issue does not lead to clear-cut results, our empirical investigation provides the following results. First, we find an inverse U-shaped relationship between the share of TAWs and firm performance. Second, we obtain that firms following the screening strategy are significantly more productive than firms following the flexibility strategy. These results are found to be valid in both cross-sectional and panel data settings, so they are robust to unobserved firm heterogeneity.
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Bibliographic InfoPaper provided by Faculty of Business and Economics - University of Basel in its series Working papers with number 2009/01.
Date of creation: 2009
Date of revision:
Temporary agency work; firm performance; flexibility strategy; screening strategy;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
- J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
- M55 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Labor Contracting Devices
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- Michael Beckmann & Dieter Kuhn, 2010. "Complementarities between Workplace Organisation and Human Resource Management:," Working papers 2010/03, Faculty of Business and Economics - University of Basel.
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