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Trade Unions and Financial Performance

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  • Machin, Stephen
  • Stewart, Mark

Abstract

This paper investigates the relationship between trade unions and financial performance using British establishment-level data. The authors estimate the average overall impact of manual union recognition in 1990 to be roughly half what it was in 1984. They report results suggesting that in 1990 unionized establishments have lower financial performance only where there are closed shop arrangements and the establishments have some product market power and that this effect is greater where managerial freedom to allocate tasks is limited by union work rules. This latter combination occurs in only about one in ten of the unionized workplaces in the authors' sample. Copyright 1996 by Royal Economic Society.

Suggested Citation

  • Machin, Stephen & Stewart, Mark, 1996. "Trade Unions and Financial Performance," Oxford Economic Papers, Oxford University Press, vol. 48(2), pages 213-241, April.
  • Handle: RePEc:oup:oxecpp:v:48:y:1996:i:2:p:213-41
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    Cited by:

    1. Machin, Stephen, 1997. "The decline of labour market institutions and the rise in wage inequality in Britain," European Economic Review, Elsevier, vol. 41(3-5), pages 647-657, April.
    2. Addison, John T. & Heywood, John S. & Wei, Xiangdong, 2001. "Unions and Plant Closings in Britain: New Evidence from the 1990/98 WERS," IZA Discussion Papers 352, Institute for the Study of Labor (IZA).
    3. David Blanchflower & Alex Bryson, 2008. "Union Decline in Britain," CEP Discussion Papers dp0864, Centre for Economic Performance, LSE.
    4. Melanie K. Jones & Richard J. Jones & Paul L. Latreille & Peter J. Sloane, 2009. "Training, Job Satisfaction, and Workplace Performance in Britain: Evidence from WERS 2004," LABOUR, CEIS, vol. 23(s1), pages 139-175, March.
    5. Dongphil Chun & Yanghon Chung & Chungwon Woo & Hangyeol Seo & Hyesoo Ko, 2015. "Labor Union Effects on Innovation and Commercialization Productivity: An Integrated Propensity Score Matching and Two-Stage Data Envelopment Analysis," Sustainability, MDPI, Open Access Journal, vol. 7(5), pages 1-19, April.
    6. Jed Devaro & Fidan Ana Kurtulus, 2011. "What types of organizations benefit from teams, and how do they benefit?," UMASS Amherst Economics Working Papers 2011-16, University of Massachusetts Amherst, Department of Economics.
    7. Patrice Laroche & Heidi Wechtler, 2011. "The Effects of Labor Unions on Workplace Performance: New Evidence from France," Journal of Labor Research, Springer, vol. 32(2), pages 157-180, June.
    8. Addison, John T. & Siebert, W. Stanley, 2002. "Changes in Collective Bargaining in the U.K," IZA Discussion Papers 562, Institute for the Study of Labor (IZA).
    9. Bryson, Alex & Forth, John & Stokes, Lucy, 2015. "Does worker wellbeing affect workplace performance?," LSE Research Online Documents on Economics 63803, London School of Economics and Political Science, LSE Library.
    10. John H. Pencavel, 2004. "The Surprising Retreat of Union Britain," NBER Chapters,in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 181-232 National Bureau of Economic Research, Inc.
    11. Francis Green & Stephen Machin & David Wilkinson, 1999. "Trade Unions and Training Practices in British Workplaces," ILR Review, Cornell University, ILR School, vol. 52(2), pages 179-195, January.
    12. Sergio Salis & Allan M. Williams, 2010. "Knowledge Sharing through Face-to-Face Communication and Labour Productivity: Evidence from British Workplaces," British Journal of Industrial Relations, London School of Economics, vol. 48(2), pages 436-459, June.
    13. Alex Bryson & John Forth & Patrice Laroche, 2009. "Unions and Workplace Performance in Britain and France," CEP Discussion Papers dp0920, Centre for Economic Performance, LSE.
    14. Jaime Saavedra-Chanduví & Máximo Torero, 2002. "Union Density Changes and Union Effects on Firm Performance in Peru," IDB Publications (Working Papers) 3282, Inter-American Development Bank.
    15. David Metcalf, 2002. "Unions and Productivity, Financial Performance and Investment: International Evidence," CEP Discussion Papers dp0539, Centre for Economic Performance, LSE.
    16. S. Dobbelaere, 2003. "Joint Estimation of Price-Cost Margins and Union Bargaining Power for Belgian Manufacturing," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/171, Ghent University, Faculty of Economics and Business Administration.
    17. John T. Addison & Clive R. Belfield, 2004. "Union Voice," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 563-596, October.
    18. Belfield, Richard & Marsden, David, 2002. "Matchmaking: the influence of monitoring environments on the effectiveness of performance pay systems," LSE Research Online Documents on Economics 3636, London School of Economics and Political Science, LSE Library.
    19. Clive Belfield, 2005. "Workforce gender effects on firm performance and workers' pay: evidence for the UK," Applied Economics, Taylor & Francis Journals, vol. 37(8), pages 885-891.
    20. Addison, John T. & Belfield, Clive R., 2007. "Unions, training and firm performance," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(4), pages 361-381.
    21. repec:iab:iabzaf:v:40:i:4:p:361-381 is not listed on IDEAS
    22. Battu, Harminder & Belfield, Clive R. & Sloane, Peter J., 2001. "Human Capital Spill-Overs Within the Workplace," IZA Discussion Papers 404, Institute for the Study of Labor (IZA).
    23. Addison, John T. & Belfield, Clive R., 2008. "Unions, Training, and Firm Performance," IZA Discussion Papers 3294, Institute for the Study of Labor (IZA).
    24. Brown, W., 2006. "The Influence of Product Markets on Industrial Relations," Cambridge Working Papers in Economics 0652, Faculty of Economics, University of Cambridge.
    25. Addison, John T. & Belfield, Clive R., 2002. "Unions and Establishment Performance: Evidence from the British Workplace Industrial/Employee Relations Surveys," IZA Discussion Papers 455, Institute for the Study of Labor (IZA).

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