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What Do Japanese Unions Do for Productivity?: An Empirical Analysis Using Firm-Level Data

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  • MORIKAWA Masayuki

Abstract

This paper empirically analyzes the relationship between union presence and firm performance in areas such as productivity and profitability by using data on a large number of Japanese firms, covering both manufacturing and non-manufacturing industries. Results indicate that the presence of labor unions has large positive effects on productivity level and growth. The effects of union presence on wages are also positive and the magnitude is similar to that of productivity. I find no negative effect for the presence of unions on firm profitability. These results differ from studies in the U.S. The number of employees decreases more for unionized firms than non-unionized firms. Most of the difference in employment is attributable to the change in the number of part-time workers. In order to enhance the productivity of the service sector, close cooperation between management and unions is required.

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Bibliographic Info

Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 08027.

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Length: 16 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:eti:dpaper:08027

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References

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  1. Hirsch, Barry, 2007. "Sluggish Institutions in a Dynamic World: Can Unions and Industrial Competition Coexist?," IZA Discussion Papers 2930, Institute for the Study of Labor (IZA).
  2. David Blanchflower & Alex Bryson, 2002. "Changes over time in union relative wage effects in the UK and the US revisited," NBER Working Papers 9395, National Bureau of Economic Research, Inc.
  3. Barry T. Hirsch, 2004. "What Do Unions Do for Economic Performance?," Journal of Labor Research, Transaction Publishers, vol. 25(3), pages 415-456, July.
  4. Nicholas Bloom & John Van Reenen, 2007. "Measuring and Explaining Management Practices Across Firms and Countries," The Quarterly Journal of Economics, MIT Press, vol. 122(4), pages 1351-1408, November.
  5. Giorgio Brunello, 1992. "The effect of unions on firm performance in Japanese manufacturing," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 45(3), pages 471-487, April.
  6. Addison, John T & Hirsch, Barry T, 1989. "Union Effects on Productivity, Profits, and Growth: Has the Long Run Arrived?," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 72-105, January.
  7. Casey Ichniowski & Kathryn Shaw, 2003. "Beyond Incentive Pay: Insiders' Estimates of the Value of Complementary Human Resource Management Practices," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 155-180, Winter.
  8. Kyoji Fukao & Hyeog Ug Kwon, 2005. "Why Did Japan's TFP Growth Slow Down in the Lost Decade? An Empirical Analysis Based on Firm-Level Data of Manufacturing Firms," Discussion papers 05004, Research Institute of Economy, Trade and Industry (RIETI).
  9. Chris Doucouliagos & Patrice Laroche, 2007. "Unions and Profitability: A Meta-Analysis," Economics Series 2007_01, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
  10. Nishimura, Kiyohiko G. & Nakajima, Takanobu & Kiyota, Kozo, 2005. "Does the natural selection mechanism still work in severe recessions?: Examination of the Japanese economy in the 1990s," Journal of Economic Behavior & Organization, Elsevier, vol. 58(1), pages 53-78, September.
  11. Victor R. Fuchs & Alan B. Krueger & James M. Poterba, 1998. "Economists' Views about Parameters, Values, and Policies: Survey Results in Labor and Public Economics," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1387-1425, September.
  12. Laroche, P., 2000. "What do Unions do to Productivity? A Meta-Analysis," Papers 2000-5, Groupe de recherche en économie financière et en gestion des entreprises, Universite Nancy 2.
  13. MORIKAWA Masayuki, 2007. "Is Productivity in the Service Industries Low? An Analysis Using Firm-level Data on the Dispersion and the Dynamics of Productivity (Japanese)," Discussion Papers (Japanese) 07048, Research Institute of Economy, Trade and Industry (RIETI).
  14. David G. Blanchflower & Alex Bryson, 2003. "What Effect do Unions Have on Wages Now and Would 'What Do Unions Do' Be Surprised?," NBER Working Papers 9973, National Bureau of Economic Research, Inc.
  15. Stephen Machin & Stephen Wood, 2005. "Human resource management as a substitute for trade unions in British workplaces," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 58(2), pages 201-218, January.
  16. Aw, Bee Yan & Chen, Xiaomin & Roberts, Mark J., 2001. "Firm-level evidence on productivity differentials and turnover in Taiwanese manufacturing," Journal of Development Economics, Elsevier, vol. 66(1), pages 51-86, October.
  17. Brown, Charles & Medoff, James, 1978. "Trade Unions in the Production Process," Journal of Political Economy, University of Chicago Press, vol. 86(3), pages 355-78, June.
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Cited by:
  1. Fujiwara, Yoshi & Iyetomi, Hiroshi & Ikeda, Yuichi & Souma, Wataru, 2009. "Distribution of Labour Productivity in Japan over the Period 1996–-2006," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 3(14), pages 1-14.
  2. Souma, Wataru & Ikeda, Yuichi & Iyetomi, Hiroshi & Fujiwara, Yoshi, 2009. "Distribution of Labour Productivity in Japan over the Period 1996–-2006," Economics Discussion Papers 2009-2, Kiel Institute for the World Economy.

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