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Trust-based Work-time and Product Improvements: Evidence from Firm Level Data

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  • Olivier N. Godart
  • Holger Görg
  • Aoife Hanley

Abstract

We explore whether the introduction of trust based working hours is related to the subsequent innovation performance of firms. Employing a panel data set of over 5,000 German establishments, we implement a propensity score matching approach where we only consider firms that did not use trust based work contracts initially. Our results show that firms which adopt such contracts tend to be between 11 to 14 percent more likely to improve products. These results hold when we control for another form of flexible time work arrangements, namely working time accounts. Thus, the positive relationship between the adoption of trust based working hours and innovation seems to be driven by the degree of control and self-management over working days, rather than by merely allowing time flexibility

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1913.

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Length: 30 pages
Date of creation: Apr 2014
Date of revision:
Handle: RePEc:kie:kieliw:1913

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Keywords: Trust based work time; innovation; firm performance;

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  1. Philippe Aghion & Nicholas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002. "Competition and innovation: an inverted U relationship," IFS Working Papers, Institute for Fiscal Studies W02/04, Institute for Fiscal Studies.
  2. Guido W. Imbens, 2003. "Nonparametric Estimation of Average Treatment Effects under Exogeneity: A Review," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0294, National Bureau of Economic Research, Inc.
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  5. Beata Javorcik & Jens Matthias Arnold, 2009. "Gifted Kids or Pushy Parents? Foreign Direct Investment and Plant Productivity in Indonesia," Economics Series Working Papers, University of Oxford, Department of Economics 434, University of Oxford, Department of Economics.
  6. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  7. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 1999. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence," NBER Working Papers 7136, National Bureau of Economic Research, Inc.
  8. Wouter Dessein & Tano Santos, 2006. "Adaptive Organizations," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 114(5), pages 956-985, October.
  9. T. Alexandra Beauregard & Lesley C. Henry, 2009. "Making the link between work-life balance practices and organizational performance," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 25224, London School of Economics and Political Science, LSE Library.
  10. Nick Bloom & Raffaella Sadun & John Van Reenen, 2009. "The organization of firms across countries," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 25481, London School of Economics and Political Science, LSE Library.
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