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Enterprise unions and downsizing in Japan before and after 1997

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  • Noda, Tomohiko
  • Hirano, Daisuke

Abstract

The purpose of this paper is to examine whether enterprise unions in Japan have changed their attitude toward downsizing before and after 1997. Our empirical analysis reveals that the attitudes of enterprise unions toward downsizing have changed since 1997. Before 1997, firms with strong unions, i.e., those affiliated with the federation, were likely to maintain employment until firms experienced two consecutive years of losses/deficits. However, after 1997, these firms tended to implement downsizing actions before they suffered deficits. These results suggest that the changes in the stances of the unions brought about changes in employment adjustment behaviors. The change in unions’ attitudes after 1997 is interpreted as being caused by the “no-layoff policy,” which was strongly associated with priority on job security over profitability. Moreover, downsizing was implemented with the consent of union members, and the cooperative relationship between unions and the management was maintained.

Suggested Citation

  • Noda, Tomohiko & Hirano, Daisuke, 2013. "Enterprise unions and downsizing in Japan before and after 1997," Journal of the Japanese and International Economies, Elsevier, vol. 28(C), pages 91-118.
  • Handle: RePEc:eee:jjieco:v:28:y:2013:i:c:p:91-118 DOI: 10.1016/j.jjie.2013.01.003
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Dobbelaere, Sabien & Kiyota, Kozo & Mairesse, Jacques, 2015. "Product and labor market imperfections and scale economies: Micro-evidence on France, Japan and the Netherlands," Journal of Comparative Economics, Elsevier, pages 290-322.
    2. Izumi Yokoyama & Takuya Obara, 2017. "Optimal combination of wage cuts and layoffs—the unexpected side effect of a performance-based payment system," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), pages 1-15.
    3. Sebastien Lechevalier & Cyrille Dossougoin & Christophe Hurlin & Satoko Takaoka, 2014. "How did the Japanese Employment System Change?Investigating the Heterogeneity of Downsizing Practices across Firms," KIER Working Papers 883, Kyoto University, Institute of Economic Research.

    More about this item

    Keywords

    Employment adjustments; Corporate governance; Enterprise unions; Downsizing;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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