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Worker Directors: A German Product that Didn't Export?

Author

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  • John T. Addison

    (School of Management, Queen’s University Belfast (U.K.) and Moore School of Business, University of South Carolina (U.S.A))

  • Claus Schnabel

    (Lehrstuhl für Arbeitsmarkt- und Regionalpolitik, Universität Erlangen-Nürnberg (Germany))

Abstract

Despite its lack of attractiveness to other countries, the German system of quasi-parity codetermination at company level has held up remarkably well. We recount the theoretical arguments for and against codetermination and survey the empirical evidence on the effects of the institution, tracing the three phases of a still sparse literature. Recent findings hold out the prospect that good corporate governance might include employee representation by virtue of the monitoring function and the reduction in agency costs, while yet cautioning that the optimal level of representation is likely below parity. And although the German system may be better than its reputation among foreigners, it might have to adapt to globalization and the availability of alternative forms of corporate governance in the EU.

Suggested Citation

  • John T. Addison & Claus Schnabel, 2009. "Worker Directors: A German Product that Didn't Export?," Professional Reports 03_09, Rimini Centre for Economic Analysis.
  • Handle: RePEc:rim:rimpre:03_09
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Hirsch, Boris & Mueller, Steffen, 2010. "Temporary agency work and the user firm's productivity: First evidence from German Panel Data," Discussion Papers 68, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    2. Boneberg Franziska, 2011. "The Economic Consequences of One-third Co-determination in German Supervisory Boards: First Evidence for the Service Sector from a New Source of Enterprise Data," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(3), pages 440-457, June.
    3. Joachim Wagner, 2011. "One-third Codetermination at Company Supervisory Boards and Firm Performance in German Manufacturing Industries: First Direct Evidence from a New Type of Enterprise Data," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 131(1), pages 91-106.
    4. Corneo, Giacomo, 2015. "Inequality, Public Wealth, and the Federal Shareholder," CEPR Discussion Papers 10920, C.E.P.R. Discussion Papers.
    5. Forcillo, Donato, 2017. "Codetermination: the Presence of Workers on the Board. A Depth Analysis," MPRA Paper 81936, University Library of Munich, Germany.
    6. Franziska Boneberg, 2010. "The Economic Consequences of one-third Codetermination in German Supervisory Boards: First Evidence for the Service Sector from a New Source of Enterprise Data," Working Paper Series in Economics 177, University of Lüneburg, Institute of Economics.
    7. Francesco D'Amuri & Cristina Giorgiantonio, 2014. "Diffusion and outlook of firm-level bargaining in Italy," Questioni di Economia e Finanza (Occasional Papers) 221, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    codetermination; board-level employee representation; firm performance; Germany;

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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