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Active owners and the failure of newly adopted works councils

  • Jirjahn, Uwe
  • Mohrenweiser, Jens

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.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 13-080.

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Date of creation: 2013
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Handle: RePEc:zbw:zewdip:13080
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  1. 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.
  2. John T. Addison & Alex Bryson & Paulino Teixeira & André Pahnke & Lutz Bellmann, 2009. "The Extent of Collective Bargaining and Workplace Representation: Transitions between States and their Determinants. A Comparative Analysis of Germany and Great Britain," GEMF Working Papers 2009-14, GEMF - Faculdade de Economia, Universidade de Coimbra.
  3. 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.
  4. Uwe Jirjahn, 2010. "Works councils and employment growth in German establishments," Cambridge Journal of Economics, Oxford University Press, vol. 34(3), pages 475-500.
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  7. 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 375-90, June.
  8. Burgess, Simon & Lane, Julia & Stevens, David, 1995. "Job Flows, Worker Flows and Churning," CEPR Discussion Papers 1125, C.E.P.R. Discussion Papers.
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  10. 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.
  11. Fuchs-Schündeln, Nicola, 2009. "On preferences for being self-employed," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 162-171, August.
  12. Uschi Backes-Gellner & Simone N. Tuor, 2010. "Avoiding Labor Shortages by Employer Signaling: On the Importance of Good Work Climate and Labor Relations," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 63(2), pages 271-286, January.
  13. 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.
  14. Steffen Mueller, 2011. "Works Councils and Firm Profits Revisited," British Journal of Industrial Relations, London School of Economics, vol. 49(Supplemen), pages s27-s43, 06.
  15. 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.
  16. Steffen Mueller, 2012. "Works Councils and Establishment Productivity," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 65(4), pages 880-898, October.
  17. Uwe Jirjahn & Jens Mohrenweiser & Uschi Backes-Gellner, 2010. "Works Councils and Learning: On the Dynamic Dimension of Codetermination," Research Papers in Economics 2010-06, University of Trier, Department of Economics.
  18. 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.
  19. Adrienne E. Eaton, 1994. "The survival of employee participation programs in unionized settings," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(3), pages 371-389, April.
  20. 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.
  21. Martin Behrens, 2009. "Still Married after All These Years? Union Organizing and the Role of Works Councils in German Industrial Relations," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 62(3), pages 275-293, April.
  22. 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, 09.
  23. Amemiya, Takeshi, 1978. "The Estimation of a Simultaneous Equation Generalized Probit Model," Econometrica, Econometric Society, vol. 46(5), pages 1193-1205, September.
  24. 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).
  25. Jan Erik Askildsen & Uwe Jirjahn & Stephan C. Smith, 2002. "Works Councils and Environmental Investment: Theory and Evidence from German Panel Data," CESifo Working Paper Series 785, CESifo Group Munich.
  26. 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).
  27. 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.
  28. 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.
  29. 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, 09.
  30. Smith, Stephen C., 1991. "On the economic rationale for codetermination law," Journal of Economic Behavior & Organization, Elsevier, vol. 16(3), pages 261-281, December.
  31. 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, 08.
  32. 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, 03.
  33. 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.
  34. 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).
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