The Impact of Wage Bargaining Regime on Firm‐Level Competitiveness and Wage Inequality: The Case of Ireland

This paper uses a linked employer‐employee dataset to analyze the impact of institutional wage bargaining regimes on average labor costs and within‐firm wage dispersion in private sector companies in Ireland. The results show that while centralized bargaining reduced labor costs within both the indigenous and foreign‐owned sectors, the relative advantage was greater among foreign‐owned firms. The analysis suggests that there are potentially large competitiveness gains to multinational companies that locate in countries implementing a centralized bargaining system. Furthermore, the results provide additional support to the view that collective bargaining reduces within‐firm wage inequality.     

Firm‐Level Monopsony and the Gender Pay Gap

This study uses linked employer–employee data to estimate firm‐by‐gender specific labor supply elasticities. Using a dynamic model of labor supply, I find evidence that females face a greater degree of search frictions than males. However, the majority of the gender gap in labor supply elasticities is driven by across‐firm sorting rather than within‐firm differences. I find that males face a labor supply elasticity 0.15 points higher than females, which leads to 3.3 percent lower earnings for women. Sixty percent of the elasticity differential can be explained by marriage and child penalties faced by women but not men.     

Collective Bargaining,Inter‐Sectoral Heterogeneity and Competitiveness: A Cross‐National Comparison of Macroeconomic Performance

Research on the performance effects of bargaining remains inconclusive. One reason for this is neglect of heterogeneity of the bargainers, namely differences in exposure to world markets and their implications for international competitiveness. Since the effects of bargaining on competitiveness depend on coping with productivity differentials between the exposed and sheltered sector, we discuss how distinct bargaining structures interact with these differentials. Exposed‐sector pattern setting is predicted to be the only bargaining structure that is sensitive to productivity differentials. The findings from time series cross‐sectional analysis corroborate the expected impact on labour costs and the current balance, whereas no employment effects are discernible.     

The Structure of Hiring Costs in Germany: Evidence from Firm‐Level Data

This paper analyzes the structure of hiring costs of skilled workers in Germany. Using detailed and representative firm‐level data on recruitment and adaptation costs of new hires, we find that average hiring costs amount to more than 8 weeks of wage payments (€4700). The structure of hiring costs is convex, as an increase in the number of hires by 1 percent increases hiring costs by 1.3 percent. We find moderate effects of labor market institutions on the magnitude but none on the structure of hiring costs. Furthermore, we provide evidence in favor of monopsony power in the German labor market.     

Where Firm‐Level Innovation and Industrial Policy Meet: Consensus Roadmaps for Low‐Carbon Powertrain Technologies

Environmental mandates, energy security concerns, and societal demands place considerable pressure on automotive manufacturers to develop novel powertrain technologies that reduce energy consumption, and in turn, carbon emissions. The economic case for these novel technologies is far from clear, however, and firms often turn to the respective national governments for R&D aid and demand‐side subsidies. Government on the other hand often feels unable to back any single technology for competition regulatory reasons, while at the same time being presented with conflicting messages from industry where to focus its support. This paper reports on an initiative by the U.K. Government that led to the establishment of a permanent forum for government‐industry exchange, the Automotive Council U.K., in which the author has participated from the outset. In the course of the Council's work, two “consensus roadmaps” have been developed jointly by industry and the U.K. Government to guide national efforts in the transition for both passenger car and commercial vehicle powertrain technologies toward low‐carbon alternatives. This paper discusses the key technological development stages and projections outlined in these technology roadmaps and comments on the general determinants of an effective interaction between government and industry in the light of a technological discontinuity.     

Human Resource Management’s Effects on Firm‐Level Relative Efficiency

Using stochastic frontier production functions methodology with data from 1579 private‐sector establishments, we demonstrate that HR practices are significantly associated with differences in relative firm‐level efficiency. Supplemental analysis implies that this efficiency analysis is substantively different than the common approach to evaluating HRM’s relationships with firm‐level labor productivity. The results suggest that HR practices’ contributions to relative firm‐level efficiency are an important but heretofore overlooked factor in the relationship between HRM and firm performance.     

The Flip Side of Organized Decentralization: Company‐Level Bargaining in Denmark

The Danish collective bargaining system is often considered a good example of organized decentralization. It has been characterized as a centralized decentralization suggesting a reproduction of sector‐level bargaining relations at company level. A recent survey on company‐level bargaining in the Danish industrial sector confirms this hypothesis with regard to the experiences of local managers and shop stewards. However, part of the survey also questions whether the reproduction will continue in the future. Small‐ and medium‐sized enterprises and their employees tend to miss out on the mutual benefits obtained through company‐level agreements. Furthermore, shop stewards often find it difficult to gain employee support during negotiations, which jeopardizes their bargaining relations with management.     

Workforce Composition and Innovation: How Diversity in Employees’ Ethnic and Educational Backgrounds Facilitates Firm‐Level Innovativeness

This article studies how workforce composition is related to a firm's success in introducing radical innovations. Previous studies have argued that teams composed of individuals with diverse backgrounds are able to perform more information processing and make deeper use of the information, which is important to accomplish complex tasks. We suggest that this argument can be extended to the level of the aggregate workforce of high‐technology firms. In particular, we argue that ethnic and higher education diversity within the workforce is associated with superior performance in radical innovation. Using a sample of 3,888 Swedish firms, this article demonstrates that having greater workforce diversity in terms of both ethnic background and educational disciplinary background is positively correlated to the share of a firm's turnover generated by radical innovation. Having more external collaborations does, however, seem to reduce the importance of educational background diversity. The impact of ethnic diversity is not affected by external collaboration. These findings hold after using alternative measures of dependent and independent variables, alternative sample sizes, and alternative estimation techniques. The research findings presented in this article would seem to have immediate and important practical implications. They would suggest that companies may pursue recruitment policies inspired by greater ethnic and disciplinary diversity as a way to boost the innovativeness of the organization. From a managerial perspective, it may be concluded that workforce disciplinary diversity could be potentially replaced by more external links, while ethnic diversity could not.     

Collective Bargaining Coverage under Trade Unionism: A Sociological Investigation

Does high union density lead to high collective bargaining coverage? Since collective bargaining is seen as the raison d'être of trade unions, this is often assumed to be the case; some observers think that union density is ‘a floor’ below which collective bargaining coverage is unlikely to fall. With its very high union density, Denmark is a case in point. This article investigates the collective bargaining coverage issue in the Danish case, based on an individual-level employee survey with 1720 respondents. Collective bargaining coverage is shown to be much lower than union density, and some methodological issues in this connection are considered. In order to find some possible explanations for this surprising finding, the question of variance of collective bargaining coverage between groups of employees is discussed in the light of theories of service society and recent research results and theories. The impact of central variables is investigated through multivariate analysis, and it turns out that by far the most important variable predicting an employee's collective bargaining coverage is a variable mostly neglected in comparative analyses: occupational status. Salaried employees have a much lower collective bargaining coverage than manual workers in Denmark, and some possible reasons for this are given.     

Poaching and Firm‐Sponsored Training

A series of seminal papers argues that poaching hampers company‐sponsored general training. Empirically, however, the existence and extent of poaching remain open questions. We provide a novel empirical strategy to identify poaching. We find that only few apprenticeship training firms in Germany are ‘poaching victims’ or ‘poaching raiders’. Victims are more likely to be in a temporary downturn and raiders are more likely to be growing. Victims hardly change their training strategy after poaching and poaching seems be a transitory event. This is an important result for countries that intend to introduce apprenticeship‐type training and need to convince firms to participate in training.     

Collective Bargaining and Wage Dispersion in Europe

The level at which collective bargaining takes place is usually considered important in determining wage levels and wage inequalities. Two different situations are considered: a first in which bargaining is only ‘multi‐employer’, and a second in which it is ‘multi‐level’, in the sense that workers can be covered by both a ‘multi‐employer’ and a ‘single‐employer’ contract at the same time. The purpose of this paper is to analyse the impact of these different institutional settings on pay dispersion. The study is carried out using the European Structure of Earnings Survey, which is a large dataset containing detailed matched employer–employee information for the year 1995. The countries analysed are Italy, Belgium and Spain. The empirical results generally show that wages of workers covered by only a ‘multi‐employer’ contract are no more compressed than those of workers covered by both ‘multi‐employer’ and ‘single‐employer’ contracts. This implies that where workers are not covered by single‐employer bargaining, they receive wage supplements paid unilaterally by their employers.     

Collective Bargaining and Within-firm Wage Dispersion in Spain

This paper analyses the effect of collective bargaining on within‐firm wage dispersion for the case of Spain. What is relevant in the Spanish case is to compare the effect of the two basic levels of bargaining (firm and sector) on wage dispersion. By using the Oaxaca–Blinder decomposition, this paper concludes that collective agreements at firm level have a negative effect on wage dispersion. At the same time, firms that have signed these types of agreements show greater wage dispersion than those covered by agreements at the sector level, owing to the positive and compensating effect of firms’ and workers’ features.     

Salary Distribution and Collective Bargaining Agreements: A Case Study of the NBA

Traditional non‐sports unions attempt to institutionalize pay between workers by reducing productivity‐related differences in wages and increasing pay differences based on seniority and other non‐productivity‐related characteristics. Recent changes made to the collective bargaining agreements of the NBA have mirrored those of unions that are more traditional. The purpose of this article is to analyze how the changes made in the bargaining agreements of the NBA affect the salary distributions of players over time.     

Influencing public policymaking: Firm‐, industry‐, and country‐level determinants

This paper examines the determinants of firms' public policymaking influence. Using a novel and global database that measures firms' perceived influence over the executive and legislative branches of government, a systematic analysis of the firm‐, industry‐, and country‐level determinants, and interrelationships among these determinants of firms' public policymaking influence is undertaken. The empirical results indicate that large firms perceive they have more public policymaking influence than small firms, but these differences are conditioned by the number of industry competitors and the structure of the country political institution environment. Nonmarket strategy implications that follow from this refined understanding are developed and discussed. Copyright © 2014 John Wiley & Sons, Ltd.     

The Form of Relationship between Firm‐Level Product Innovativeness and New Product Performance in Developed and Emerging Markets

This study compares the new product performance outcomes of firm‐level product innovativeness across a developed and emerging market context. In so doing, a model is constructed in which the relationship between firm‐level product innovativeness and new product performance is anticipated to be curvilinear, and in which the nature of this relationship is argued to be dependent on organizational and environmental factors. The model is tested using primary data obtained from chief executive officers and finance managers in 319 firms operating in the United Kingdom, an advanced Western market, and 221 firms from Ghana, an emerging Sub‐Saharan African market. The model is assessed using a structural equation model multigroup analysis approach with LISREL 8.5. In the United Kingdom and Ghana, the basic form of the relationship between firm‐level product innovativeness and business success is inverted U‐shaped, but the strength and/or form of this relationship changes under differing levels of market orientation, access to financial resources, and environmental dynamism. While commonalities are identified across the two countries (market orientation helps firms leverage their product innovativeness), differences are also observed across the samples. In Ghana, access to financial resources enhances the relationship between product innovativeness and new product performance, unlike in the United Kingdom where no moderation is observed. Furthermore, while U.K. firms leverage product innovativeness to their advantage in more dynamic environments, Ghanaian firms do not benefit in this way: here, high levels of innovation activity are less useful when markets are more dynamic. If the study's findings generalize, there are a number of implications for managers of both emerging and developed market businesses. First, managers in both developed and developing market firms should focus on determining and managing an optimal balance of novel and intensive product innovativeness within the context of their unique institutional environments. Second, for emerging market firms, a market orientation capability helps businesses leverage local market intelligence, enabling them to compete with multinational giants flocking to emerging markets, but typical developed market learning approaches may be insufficient for multinational firms when seeking to compete in emerging markets. Third, for emerging market firms, access to finances helps deliver product innovation success (although this is not the case for developed market firms, possibly due to strong financial institutions). Finally, unlike developed market firms, burdened by institutional voids at home, emerging market firms appear to be less capable of competing on an innovation front in more dynamic market conditions. Accordingly, policymakers in emerging markets should consider identifying ways to help businesses raise market orientation levels, and seek to create conditions that enhance access to financial capital (e.g., direct financing, matching grants, tax rebates, or rewarding firms that innovate creatively and intensely). Likewise, since environmental dynamism is likely to be a growing issue for emerging markets, efforts to help firms become more adept at keeping up with more agile developed market counterparts are needed.     

Collective Bargaining and High‐Involvement Management in Comparative Perspective: Evidence from U.S. and German Call Centers

This article assesses the relationship between national and collective bargaining institutions, management practices, and employee turnover, based on case study and survey evidence from U.S. and German call center workplaces. German call centers were more likely to adopt high‐involvement management practices than those in the United States, even across workplaces with no collective bargaining institutions. Within Germany, union and works council presence was positively associated with high‐involvement practices, while works council presence alone had no effect. In contrast, union presence in U.S. call centers showed either a negative association or no association with these practices. National and collective bargaining institutions and high‐involvement management practices were associated with lower quit rates in both countries, with only partial mediation.     

Instability and Change in Collective Bargaining: An Analysis of the Effects of Changing Institutional Structures

Previous studies on collective bargaining structures and macroeconomic performance have largely ignored the role of stable and instable institutional structures and the effects of institutional change itself. In this article we posit that institutional stability of collective bargaining is of major importance for the moderation of unit labour costs growth. This hypothesis is tested on the basis of data which cover the period 1965–2012 and includes 28 countries. The results show that institutional change impairs the capacity to moderate unit labour cost growth significantly in the subsequent years following the change. This effect also holds for changes in both decentralization and centralization of institutions.     

The Effect of Minimum Wages on Labour Market Outcomes: County‐Level Estimates from the Restaurant‐and‐Bar Sector

We use US county‐level data on employment and earnings in the restaurant‐and‐bar sector to evaluate the impact of minimum‐wage changes in low‐wage labour markets. Our estimated models are consistent with a simple competitive model in which supply‐and‐demand factors affect both the equilibrium outcome and the probability of the minimum wage being binding. Our evidence does not suggest that minimum wages reduce employment once controls for trends in county‐level sectoral employment are incorporated. Rather, employment appears to exhibit an independent downward trend in states that have increased their minimum wages relative to states that have not, thereby predisposing estimates towards reporting negative outcomes.     

Bribery and investment: Firm‐level evidence from Africa and Latin America

Research summary : Using a unique database that measures firm‐level bribery in Africa and Latin America, we corroborate extant results in the literature that paying bribes deters firm investments in fixed assets. Our contribution is to explore four mechanisms. By adopting a reverse causality approach (Gelman and Imbens, 2013), we find evidence consistent with one of them: short‐term oriented firms prefer to bribe rather than invest in fixed assets, while the opposite is true for firms with a long‐term orientation. We rule out that bribe payments drain financial resources for investment, that firms that invest do not bribe because fixed assets make them less flexible and more vulnerable to future bribes, and that less efficient firms bribe rather than invest. Managerial summary : We ask whether, along with ethical issues, bribing affects the behavior and performance of firms in Africa and Latin America. Our statistical analysis shows that bribe payments do not reduce the short‐term performance of firms, but frustrate investments in fixed assets, which is the foundation of firms' long‐term growth. It is like seeking a job via nepotism or education. Nepotism makes it likely to find a job in the short term. However, the solid skills generated by education raise the odds of finding better jobs in the future. We rule out some common explanations for the trade‐off between bribing and investment (e.g., bribes drain resources to invest or that less efficient firms bribe and do not invest). Our analysis suggests that firms with short‐term orientations are more likely to bribe and firms with long‐term orientation are more likely to invest. Copyright © 2015 John Wiley & Sons, Ltd.