IDEAS home Printed from https://ideas.repec.org/p/trr/wpaper/201304.html
   My bibliography  Save this paper

Active Owners and the Failure of Newly Adopted Works Councils

Author

Listed:
  • Uwe Jirjahn
  • Jens Mohrenweiser

Abstract

Using representative data from the IAB Establishment Panel, we show that employees in establishments with active owners are less likely to introduce a works council. Moreover, we show that, in case of an introduction, the new works council is less likely to survive if active owners are present. Our findings conform to the hypothesis that active owners oppose codetermination because it reduces the utility they gain from being the ultimate bosses within the establishment.

Suggested Citation

  • Uwe Jirjahn & Jens Mohrenweiser, 2013. "Active Owners and the Failure of Newly Adopted Works Councils," Research Papers in Economics 2013-04, University of Trier, Department of Economics.
  • Handle: RePEc:trr:wpaper:201304
    as

    Download full text from publisher

    File URL: http://www.uni-trier.de/fileadmin/fb4/prof/VWL/EWF/Research_Papers/2013-04.pdf
    File Function: First version, 2013
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. John Schmitt & Ben Zipperer, 2007. "Dropping the Ax: Illegal Firings During Union Election Campaigns," CEPR Reports and Issue Briefs 2007-01, Center for Economic and Policy Research (CEPR).
    2. Burgess, Simon & Lane, Julia & Stevens, David, 2000. "Job Flows, Worker Flows, and Churning," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 473-502, July.
    3. Wagner Joachim & Schank Thorsten & Schnabel Claus & Addison John T., 2006. "Works Councils, Labor Productivity and Plant Heterogeneity: First Evidence from Quantile Regressions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(5), pages 505-518, October.
    4. John Logan, 2006. "The Union Avoidance Industry in the United States," British Journal of Industrial Relations, London School of Economics, vol. 44(4), pages 651-675, December.
    5. Uschi Backes-Gellner & Jens Mohrenweiser & Kerstin Pull, 2011. "When Does Regulation Bite? Co-Determination and the Nature of Employment Relations," Working Papers 0147, University of Zurich, Institute for Strategy and Business Economics (ISU).
    6. Uschi Backes-Gellner & Simone N. Tuor, 2010. "Avoiding Labor Shortages by Employer Signaling: On the Importance of Good Work Climate and Labor Relations," ILR Review, Cornell University, ILR School, vol. 63(2), pages 271-286, January.
    7. Mohrenweiser, Jens & Zwick, Thomas, 2009. "Why do firms train apprentices? The net cost puzzle reconsidered," Labour Economics, Elsevier, vol. 16(6), pages 631-637, December.
    8. John T. Addison & Alex Bryson & Paulino Teixeira & André Pahnke & Lutz Bellmann, 2013. "The Extent of Collective Bargaining and Workplace Representation: Transitions between States and their Determinants. A Comparative Analysis of Germany and Great Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(2), pages 182-209, May.
    9. Joachim Wagner, 2008. "German works councils and productivity: first evidence from a nonparametric test," Applied Economics Letters, Taylor & Francis Journals, vol. 15(9), pages 727-730.
    10. Newey, Whitney K., 1987. "Efficient estimation of limited dependent variable models with endogenous explanatory variables," Journal of Econometrics, Elsevier, vol. 36(3), pages 231-250, November.
    11. Uwe Jirjahn, 2010. "Works councils and employment growth in German establishments," Cambridge Journal of Economics, Oxford University Press, vol. 34(3), pages 475-500.
    12. Jens Stegmaier, 2012. "Effects of Works Councils on Firm-Provided Further Training in Germany," British Journal of Industrial Relations, London School of Economics, vol. 50(4), pages 667-689, December.
    13. Uwe Jirjahn & Jens Mohrenweiser & Uschi Backes‐Gellner, 2011. "Works Councils and Learning: On the Dynamic Dimension of Codetermination," Kyklos, Wiley Blackwell, vol. 64(3), pages 427-447, August.
    14. Askildsen, Jan Erik & Jirjahn, Uwe & Smith, Stephen C., 2006. "Works councils and environmental investment: Theory and evidence from German panel data," Journal of Economic Behavior & Organization, Elsevier, vol. 60(3), pages 346-372, July.
    15. Uwe Jirjahn, 2009. "The Introduction of Works Councils in German Establishments - Rent Seeking or Rent Protection?," British Journal of Industrial Relations, London School of Economics, vol. 47(3), pages 521-545, September.
    16. Amemiya, Takeshi, 1978. "The Estimation of a Simultaneous Equation Generalized Probit Model," Econometrica, Econometric Society, vol. 46(5), pages 1193-1205, September.
    17. Thomas Zwick, 2007. "Apprenticeship Training in Germany? Investment or Productivity Driven?," ZEW Discussion Papers 07-023, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    18. Olaf H¸bler & Uwe Jirjahn, 2003. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(4), pages 471-491, September.
    19. Christian Pfeifer, 2011. "The Heterogeneous Economic Consequences of Works Council Relations," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 131(1), pages 59-71.
    20. Fuchs-Schündeln, Nicola, 2009. "On preferences for being self-employed," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 162-171, August.
    21. Steffen Mueller, 2012. "Works Councils and Establishment Productivity," ILR Review, Cornell University, ILR School, vol. 65(4), pages 880-898, October.
    22. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
    23. Richard Hyman, 1996. "Institutional Transfer: Industrial Relations in Eastern Germany," Work, Employment & Society, British Sociological Association, vol. 10(4), pages 601-639, December.
    24. Uwe Jirjahn & Steffen Mueller, 2014. "Non-union worker representation, foreign owners, and the performance of establishments," Oxford Economic Papers, Oxford University Press, vol. 66(1), pages 140-163, January.
    25. Jens Mohrenweiser & Paul Marginson & Uschi Backes-Gellner, 2009. "What Triggers the Establishment of a Works Council?," Working Papers 0101, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Jul 2010.
    26. Steffen Mueller, 2011. "Works Councils and Firm Profits Revisited," British Journal of Industrial Relations, London School of Economics, vol. 49(Supplemen), pages 27-43, June.
    27. Hyman, Richard, 1996. "Institutional transfer: industrial relations in eastern Germany," Discussion Papers, Research Unit: Economic Change and Employment FS I 96-305, Social Science Research Center Berlin (WZB).
    28. Uwe Jirjahn, 2008. "On the Determinants of Shift Work and Overtime Work: Evidence from German Establishment Data," British Journal of Industrial Relations, London School of Economics, vol. 46(1), pages 133-168, March.
    29. Adrienne E. Eaton, 1994. "The Survival of Employee Participation Programs in Unionized Settings," ILR Review, Cornell University, ILR School, vol. 47(3), pages 371-389, April.
    30. Thomas Zwick, 2005. "Continuing Vocational Training Forms and Establishment Productivity in Germany," German Economic Review, Verein für Socialpolitik, vol. 6(2), pages 155-184, May.
    31. Smith, Stephen C., 1991. "On the economic rationale for codetermination law," Journal of Economic Behavior & Organization, Elsevier, vol. 16(3), pages 261-281, December.
    32. Demsetz, Harold, 1983. "The Structure of Ownership and the Theory of the Firm," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 375-390, June.
    33. Uwe Jirjahn & Kornelius Kraft, 2011. "Do Spillovers Stimulate Incremental or Drastic Product Innovations? Evidence from German Establishment Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 73(4), pages 509-538, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Olaf Hübler, 2015. "Do works councils raise or lower firm productivity?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 137-137, March.

    More about this item

    Keywords

    Active Owner; Works Council Introduction; Works Council Dissolution; Liability of Newness; Employer Resistance to Change;

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:trr:wpaper:201304. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Matthias Neuenkirch). General contact details of provider: http://edirc.repec.org/data/petride.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.