TY - JOUR

T1 - Do works councils inhibit investment?

AU - Schank, Thorsten

AU - Schnabel, Claus

AU - Wagner, Joachim

AU - Addison, John T.

PY - 2007/1

Y1 - 2007/1

N2 - Theory suggests that firms confront a hold-up problem in dealing with workplace unionism: unions will appropriate a portion of the quasi-rents stemming from long-lived capital. As a result, firms may be expected to limit their exposure to rent-seeking by reducing investments. The U.S. evidence points clearly in this direction. The authors of this paper investigate whether the same is true for German works councils, the analogue of workplace unionism in that nation. Using establishment panel data for the years 1998-2003, they find no evidence that a works council's formation adversely affected investment or that its dissolution favorably affected investment.

AB - Theory suggests that firms confront a hold-up problem in dealing with workplace unionism: unions will appropriate a portion of the quasi-rents stemming from long-lived capital. As a result, firms may be expected to limit their exposure to rent-seeking by reducing investments. The U.S. evidence points clearly in this direction. The authors of this paper investigate whether the same is true for German works councils, the analogue of workplace unionism in that nation. Using establishment panel data for the years 1998-2003, they find no evidence that a works council's formation adversely affected investment or that its dissolution favorably affected investment.

KW - Economics

KW - Gender and Diversity

UR - http://www.scopus.com/inward/record.url?scp=33846947986&partnerID=8YFLogxK

UR - https://www.mendeley.com/catalogue/e6851790-132c-3f0f-981c-bc6635774ece/

U2 - 10.1177/001979390706000202

DO - 10.1177/001979390706000202

M3 - Journal articles

VL - 60

SP - 187

EP - 203

JO - Industrial and Labor Relations Review

JF - Industrial and Labor Relations Review

SN - 0019-7939

IS - 2

ER -