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Owners, external managers and industrial relations in German establishments


  • Arnd Kölling
  • Claus Schnabel


Using data from the representative IAB Establishment Panel in Germany and estimating a heteroskedastic probit model with fixed effects, this paper finds a negative relationship between the existence of owner‐management in an establishment and the probabilities of having a works council or a collective bargaining agreement. We show that family firms which are solely managed by the owners or by external executives significantly differ in the presence of these kinds of worker representation. The probabilities of having works councils and (company‐level) collective agreements increase substantially if just some of the managers do not belong to the owner family. We argue that these differences cannot simply be attributed to an aversion of the owners against co‐determination and unions but suggest taking account of the notion of socio‐emotional wealth prevalent in family firms. In addition, our results support the idea that external managers mainly act as agents rather than stewards in family firms.

Suggested Citation

  • Arnd Kölling & Claus Schnabel, 2022. "Owners, external managers and industrial relations in German establishments," British Journal of Industrial Relations, London School of Economics, vol. 60(2), pages 424-443, June.
  • Handle: RePEc:bla:brjirl:v:60:y:2022:i:2:p:424-443
    DOI: 10.1111/bjir.12623

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    References listed on IDEAS

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    Cited by:

    1. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).

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    More about this item

    JEL classification:

    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill


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