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While Labour Hoarding May Be Over, Insiders’ Control Is Not. Determinants Of Employment Growth In Polish Large Firms, 1996-2001

  • Kate Bishop

    ()

  • Tomasz Mickiewicz

    ()

This paper examines the determinants of employment changes using a panel of Polish large firms during the period 1996-2001. We investigate the impact of wages, output growth, investment, firm size and sectors upon employment, focusing on the asymmetry hypothesis. We find that investment plays an important role in enhancing employment growth. We also notice that employment dynamics is not affected by alternative wages and therefore appears consistent with the ‘right to manage’ model. Furthermore, unlike the early transition period, we can confirm that employment adjusts to positive sales growth, not just to decline as found in studies on earlier periods (K?ll?, 1998). This reflects that labour hoarding can no longer be a factor, which decreased employment elasticity in times of positive demand shocks. Interestingly, large state companies appear to cut employment in response to output growth, when one controls for investment. A result, which may be consistent with the insiders (employee) control model.

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File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp593.pdf
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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 2003-593.

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Length: 49 pages
Date of creation: 01 Jul 2003
Date of revision:
Handle: RePEc:wdi:papers:2003-593
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