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Works Councils and Plant Closings in Germany

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  • John T. Addison
  • Lutz Bellmann
  • Arnd Kölling

Abstract

This paper is the first study to investigate the impact of workplace representation on plant closings in Germany, using data from a nationally representative establishment panel. Across all establishments in our sample, we find evidence of a positive association between works council presence and plant closings. There is the contrary suggestion that industry-wide collective bargaining plays a neutral to benign role. As for the interaction between collective bargaining and workplace representation, this appears strongest for establishments with fewer than 50 employees: such plants are much more likely to close if they have a works council and are not covered by a collective agreement. Copyright Blackwell Publishing Ltd/London School of Economics 2004.

Suggested Citation

  • John T. Addison & Lutz Bellmann & Arnd Kölling, 2004. "Works Councils and Plant Closings in Germany," British Journal of Industrial Relations, London School of Economics, vol. 42(1), pages 125-148, March.
  • Handle: RePEc:bla:brjirl:v:42:y:2004:i:1:p:125-148
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    References listed on IDEAS

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    1. Barry T. Hirsch, 1991. "Labor Unions and the Economic Performance of Unions," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number luepf, November.
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    Cited by:

    1. John T. Addison & Claus Schnabel & Joachim Wagner, 2004. "The Course of Research into the Economic Consequences of German Works Councils," British Journal of Industrial Relations, London School of Economics, vol. 42(2), pages 255-281, June.
    2. Anabela Carneiro & Pedro Portugal, 2008. "Wages and the Risk of Displacement," Research in Labor Economics,in: Work, Earnings and Other Aspects of the Employment Relation, volume 28, pages 251-276 Emerald Publishing Ltd.
    3. Bellmann, Lutz & Gerner, Hans-Dieter & Upward, Richard, 2011. "Job and Worker Turnover in German Establishments," IZA Discussion Papers 6081, Institute for the Study of Labor (IZA).
    4. Addison, John T. & Teixeira, Paulino, 2004. "The Effect of Worker Representation on Employment Behavior in Germany: Another Case of -2.5%," IZA Discussion Papers 1188, Institute for the Study of Labor (IZA).
    5. Boris Hirsch & Thorsten Schank & Claus Schnabel, 2009. "Works Councils and Separations: Voice, Monopoly, and Insurance Effects," Working Papers 075, Bavarian Graduate Program in Economics (BGPE).
    6. Daniel Fackler & Claus Schnabel & Joachim Wagner, 2013. "Establishment exits in Germany: the role of size and age," Small Business Economics, Springer, vol. 41(3), pages 683-700, October.
    7. Martyn Andrews & Lutz Bellmann & Thorsten Schank & Richard Upward, 2012. "Foreign-owned plants and job security," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(1), pages 89-117, April.
    8. Addison, John T., 2005. "The Determinants of Firm Performance: Unions, Works Councils, and Employee Involvement/High Performance Work Practices," IZA Discussion Papers 1620, Institute for the Study of Labor (IZA).
    9. repec:iab:iabzaf:v:38:i:2/3:p:268-283 is not listed on IDEAS
    10. Olaf Hübler, 2003. "Fördern oder behindern Betriebsräte die Unternehmensentwicklung?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 4(4), pages 379-397, November.
    11. Uwe Jirjahn, 2009. "The Introduction of Works Councils in German Establishments - Rent Seeking or Rent Protection?," British Journal of Industrial Relations, London School of Economics, vol. 47(3), pages 521-545, September.
    12. repec:bla:brjirl:v:55:y:2017:i:2:p:372-395 is not listed on IDEAS
    13. Addison, John T. & Schank, Thorsten & Schnabel, Claus & Wagner, Joachim, 2003. "German Works Councils in the Production Process," IZA Discussion Papers 812, Institute for the Study of Labor (IZA).
    14. Steffen Mueller & Jens Stegmaier, 2017. "The Dynamic Effects of Works Councils on Labour Productivity: First Evidence from Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 55(2), pages 372-395, June.
    15. Schultz, Birgit, 2006. "Möglichkeiten und Grenzen des Matching-Ansatzes – am Beispiel der betrieblichen Mitbestimmung," IWH Discussion Papers 15/2006, Halle Institute for Economic Research (IWH).
    16. Grund, Christian & Martin, Johannes, 2017. "The Role of Works Councils for Severance Payments," IZA Discussion Papers 10750, Institute for the Study of Labor (IZA).
    17. Franz, Wolfgang, 2005. "Die deutsche Mitbestimmung auf dem Prüfstand : Bilanz und Vorschläge für eine Neuausrichtung (The German model of codetermination under test * conclusions and suggestions for reorientation)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 38(2/3), pages 268-283.
    18. Schultz Birgit, 2006. "Mikroökonometrische Evaluation der ökonomischen Wirkungen betrieblicher Mitbestimmung - Möglichkeiten und Grenzen des Matching-Ansatzes / Microeconometric Evaluation of Economic Effects of Workers Par," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(5), pages 519-536, October.

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