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

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  • Sebastian Nielen
  • Alexander Schiersch

Abstract

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, data set of German manufacturing enterprises. The analysis is conducted 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 a U-shaped relationship between the extent that temporary agency workers are used and the competitiveness of firms.

Suggested Citation

  • Sebastian Nielen & Alexander Schiersch, 2011. "Temporary Agency Work and Firm Competitiveness: Evidence from German Manufacturing Firms," Discussion Papers of DIW Berlin 1135, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1135
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. repec:spr:ijlaec:v:60:y:2017:i:2:d:10.1007_s41027-017-0092-1 is not listed on IDEAS
    3. Alex Bryson, 2013. "Do temporary agency workers affect workplace performance?," Journal of Productivity Analysis, Springer, vol. 39(2), pages 131-138, April.
    4. Kampelmann, Stephan & Mahy, Benoît & Rycx, Francois & Vermeylen, Guillaume, 2016. "Who Is Your Perfect Match? Educational Norms, Educational Mismatch and Firm Profitability," IZA Discussion Papers 10399, Institute for the Study of Labor (IZA).
    5. 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.
    6. repec:spr:jlabrs:v:50:y:2017:i:1:d:10.1007_s12651-017-0222-8 is not listed on IDEAS
    7. George, Elizabeth. & Chattopadhyay, Prithviraj., 2015. "Non-standard work and workers : organizational implications," ILO Working Papers 994883083402676, International Labour Organization.
    8. 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.

    More about this item

    Keywords

    temporary agency work; competitiveness; firm performance; manufacturing;

    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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