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Temporary Agency Work and Firm Competitiveness: Evidence from German Manufacturing Firms

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  • Sebastian Nielen
  • Alexander Schiersch

Abstract

type="main" xml:id="irel12062-abs-0001"> This paper addresses the relationship between the utilization of temporary agency workers by firms and their competitiveness measured by unit labor costs, using a rich, newly built, dataset of German manufacturing enterprises. We conduct the analysis by applying different panel data models while taking the inherent selection problem into account. Making use of dynamic panel data models allows us to control for firm-specific fixed effects as well as for potential endogeneity of explanatory variables. The results indicate an inverse U-shaped relationship between the extent that temporary agency workers are used and the competitiveness of firms.

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  • Sebastian Nielen & Alexander Schiersch, 2014. "Temporary Agency Work and Firm Competitiveness: Evidence from German Manufacturing Firms," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(3), pages 365-393, July.
    • Handle: RePEc:bla:indres:v:53:y:2014:i:3:p:365-393
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    Cited by:

    1. Domenico Lisi & Miguel A. Malo, 2017. "The impact of temporary employment on productivity [Auswirkungen befristeter Beschäftigung auf die Produktivität]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 50(1), pages 91-112, August.
    2. Addison, John T. & Teixeira, Paulino & Grunau, Philipp & Bellmann, Lutz, 2018. "Worker Representation and Temporary Employment in Germany: The Deployment and Extent of Fixed-Term Contracts and Temporary Agency Work," IZA Discussion Papers 11378, Institute of Labor Economics (IZA).
    3. François Rycx & Yves Saks & Ilan Tojerow, 2015. "Does Education Raise Productivity and Wages Equally? The Moderating Roles of Age, Gender and Industry," Working Paper Research 281, National Bank of Belgium.
    4. George, Elizabeth. & Chattopadhyay, Prithviraj., 2015. "Non-standard work and workers : organizational implications," ILO Working Papers 994883083402676, International Labour Organization.
    5. Stephan Kampelmann & François Rycx & Yves Saks & Ilan Tojerow, 2018. "Does education raise productivity and wages equally? The moderating role of age and gender," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-37, December.
    6. Pfeifer Christian & Weche John P., 2020. "Temporary Agency Work and Firm Performance: A Replication Study with Extensions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(4), pages 455-465, August.
    7. Andrea Garnero & François Rycx & Isabelle Terraz, 2020. "Productivity and Wage Effects of Firm‐Level Collective Agreements: Evidence from Belgian Linked Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 58(4), pages 936-972, December.
    8. Alex Bryson, 2013. "Do temporary agency workers affect workplace performance?," Journal of Productivity Analysis, Springer, vol. 39(2), pages 131-138, April.
    9. Romina Giuliano & Stephan Kampelmann & Benoît Mahy & François Rycx, 2017. "Short Notice, Big Difference? The Effect of Temporary Employment on Firm Competitiveness across Sectors," British Journal of Industrial Relations, London School of Economics, vol. 55(2), pages 421-449, June.
    10. Janine Berg, 2017. "Contractual status, worker well-being and economic development," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 60(2), pages 121-136, June.
    11. Alejandro Micco & Pablo Muñoz-Henríquez, 2018. "The Impact of Extended Employment Protection Laws on the Demand for Temporary Agency Workers," Working Papers wp463, University of Chile, Department of Economics.
    12. Sujata, Uwe & Witschaß, Martin, 2015. "Die Zeitarbeit in Südwestsachsen : Strukturen und Entwicklungen," IAB-Regional. Berichte und Analysen aus dem Regionalen Forschungsnetz. IAB Sachsen 201503, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    13. Bachmann, Ronald & Martinez Flores, Fernanda & Rulff, Christian, 2022. "Die Lohnlücke in der Zeitarbeit: Eine empirische Analyse auf Grundlage von BA-Daten und der Verdienststrukturerhebung," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 262219.
    14. Kampelmann, Stephan & Mahy, Benoît & Rycx, François & Vermeylen, Guillaume, 2016. "Who Is Your Perfect Match? Educational Norms, Educational Mismatch and Firm Profitability," IZA Discussion Papers 10399, Institute of Labor Economics (IZA).
    15. Benoît Mahy & François Rycx & Guillaume Vermeylen & Mélanie Volral, 2022. "Productivity and wage effects of firm‐level upstreamness: Evidence from Belgian linked panel data," The World Economy, Wiley Blackwell, vol. 45(7), pages 2222-2250, July.
    16. Benoît Mahy & François Rycx & Guillaume Vermeylen & Mélanie Volral, 2018. "Productivity, wages and profits: Does firms’ position in the value chain matter?," Working Paper Research 358, National Bank of Belgium.
    17. Genevieve Knight & Zhang Wei, 2015. "Isolating the Determinants of Temporary Agency Worker Use by Firms: An Analysis of Temporary Agency Workers in Australian Aged Care," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 18(2), pages 205-237.
    18. Svotwa, Kudakwashe & Svotwa, Ezekia & Rugube, Thandiwe, 2019. "The Influence Of Employment Modes On Employee Turnover And Agri-Business Performance: A Case For Hunyani Farm In The Zvimba District, Zimbabwe," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 13(3-4), December.
    19. Jennifer Ferreira, 2016. "The German temporary staffing industry: growth, development, scandal and resistance," Industrial Relations Journal, Wiley Blackwell, vol. 47(2), pages 117-143, March.
    20. Bachmann, Ronald & Martinez Flores, Fernanda & Rulf, Christian, 2022. "Die Lohnlücke in der Zeitarbeit: Eine empirische Analyse auf Grundlage der Integrierten Erwerbsbiografien und der Verdienststrukturerhebung," RWI Materialien 153, RWI - Leibniz-Institut für Wirtschaftsforschung.

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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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