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The Impact of Worker Bargaining Power on the Organization of Global Firms

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  • Carluccio, J.
  • Bas, M.

Abstract

In this paper, I study how the CEO's election can be biased if some directors in the board belong to the same network. I use a static Bayesian game. Directors want to elect the best candidate but they also want to vote for the winner. In that context, results show that, when no candidate is part of the network, boards with a network perform better in electing the right candidate. On the other hand, it becomes detrimental for stockholders if one candidate is part of the network. Indeed, compared to a situation where there are no interconnections between directors, the directors who are members of a network vote more often for the candidate they think is best, rather than for the one they think might win. The ones who are not part of the network follow their lead. Thus the network has power on the result of the election and therefore limits the power of the future CEO.

Suggested Citation

  • Carluccio, J. & Bas, M., 2013. "The Impact of Worker Bargaining Power on the Organization of Global Firms," Working papers 460, Banque de France.
  • Handle: RePEc:bfr:banfra:460
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    Cited by:

    1. Chrysovalantou Milliou & Joel Sandonis, 2020. "Vertical foreign direct investment: Make, buy, and sell," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 884-912, August.
    2. Dobbelaere, Sabien & Kiyota, Kozo, 2018. "Labor market imperfections, markups and productivity in multinationals and exporters," Labour Economics, Elsevier, vol. 53(C), pages 198-212.
    3. Hideaki Aoyama & Corrado Di Guilmi & Yoshi Fujiwara & Hiroshi Yoshikawa, 2021. "Dual labor market and the "Phillips curve puzzle"," CAMA Working Papers 2021-49, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    4. Berlingieri, Giuseppe & Pisch, Frank & Steinwender, Claudia, 2018. "Organizing global supply chains: input costs shares and vertical integration," LSE Research Online Documents on Economics 91706, London School of Economics and Political Science, LSE Library.
    5. Eppinger, Peter & Kukharskyy, Bohdan, 2021. "Contracting institutions and firm integration around the world," European Economic Review, Elsevier, vol. 137(C).
    6. Philipp Herkenhoff & Sebastian Krautheim, 2018. "The International Organization of Production in the Regulatory Void," CESifo Working Paper Series 6922, CESifo.
    7. Ghebrihiwet, Nahom, 2017. "Acquisition or direct entry, technology transfer, and FDI policy liberalization," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 455-469.
    8. Kohler, Wilhelm & Smolka, Marcel, 2021. "Productivity and firm boundaries," European Economic Review, Elsevier, vol. 135(C).
    9. Chrysovalantou Milliou & Joel Sandonis, 2016. "Vertical Foreign Direct Investment: Make, Sell and (Not) Buy," CESifo Working Paper Series 6190, CESifo.
    10. Giuseppe Berlingieri & Frank Pisch & Claudia Steinwender, 2018. "Organizing global supply chains: input-output linkages and vertical integration," CEP Discussion Papers dp1583, Centre for Economic Performance, LSE.
    11. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2021. "International outsourcing and trade union (de-)centralisation," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 76-91.

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    More about this item

    Keywords

    worker bargaining power; firm-boundaries; intra-firm trade.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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