‘til Dissolution Do Us Part: (Re)Assessing the First Contract and Trial Marriage Goals of First Contract Arbitration in Ontario

Using a series of labor law reforms in the Canadian province of Ontario between 1991 and1998, this article seeks to (re)assess and compare the effectiveness of two forms of first contract arbitration (FCA) in satisfying the primary policy goals of aiding in the achievement of a first contract and in establishing lasting bargaining relationships. In contrast to previous research findings using this setting, the analysis fails to identify any statistically significant difference in the achievement of first contracts across the automatic and no‐fault forms of FCA. Further, estimates do not appear to identify a statistically significant difference in the establishment of lasting bargaining relationships, defined as the settlement of three of more collective agreements, across the two forms of FCA. These findings indicate that differences observed during this period in the first contract success rate and the establishment of bargaining relationships may be confounded with other factors than the changes to first contract arbitration.     

Testing a Behavioral Theory Model of Labor Negotiations

The Behavioral Theory we have developed stands up well and helps us gain a better feeling for the behavioral dynamics of collective bargaining. As expected, economic variables such as bargaining power and the estimated cost and probability of a work stoppage are important determinants of bargaining behavior. Nevertheless, the variables have a differential effect on bargaining goals, with strong bargaining power and low probability of a strike contributing to both distributive and integrative bargaining, whereas high expected costs of a strike help to persuade constituents to support their negotiators (intraorganizational bargaining). Thus we see the roie of intraorganizational bargaining as an alternative to being able to obtain a better settlement from the opponents. Attitudinal structuring seems to be more closely tied to integrative bargaining than was indicated by Walton and McKersie. Furthermore, there seems to be less direct conflict between the tactics used in integrative bargaining and those used in distributive bargaining than predicted by theory. Perhaps the mixed nature of most bargaining keeps the majority of negotiators from applying all-out distributive tactics. At any rate, strong bargaining power, constructive relationships, clear and specific statements of issues, as well as exploring them in a noncommital fashion, seem to aid both distributive and integrative bargaining. We uncovered a number of relationships which varied significantly according to the side (labor or management) and/or team role (chief negotiator or other team member) of the respondent. Although we feel they should be included in the theory of bargaining as moderator variables, and have thus included them in our model, we have only hinted at their impact in this paper. Overall, bargaining behavior and conditions seem to have as much effect on bargaining success as do the economic variables. Of course, we did not measure every possible economic variable, but neither did we examine all possible tactics. Our study confirms that collective bargaining is an interpersonal, attitudinal process as well as an economic one and that there are several distinct goals for the process. We have also demonstrated that, despite problems of locating current negotiations and obtaining an adequate rate of response, field study of the behavioral aspects of collective bargaining is feasible. We hope that investigations along this line will continue.     

One‐Stop Shopping Behavior,Buyer Power and Upstream Merger Incentives

We analyze how consumer preferences for one‐stop shopping affect the (Nash) bargaining relationships between a retailer and its suppliers. One‐stop shopping preferences create ‘demand complementarities’ among otherwise independent products which lead to two opposing effects on upstream merger incentives: first a standard double mark‐up problem and second a bargaining effect. The former creates merger incentives while the later induces suppliers to bargain separately. When buyer power becomes large enough, then suppliers stay separated which raises final good prices. We also show that our result can be obtained when wholesale prices are determined in a non‐cooperative game and under two‐part tariffs.     

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.     

Imports as Product and Labour Market Discipline

This article tests the pro‐competitive effect of trade in the product and labour markets of UK manufacturing sectors between 1988 and 2003 using a two‐stage estimation procedure. In the first stage, we use data on 11,799 firms from 20 manufacturing sectors to simultaneously estimate mark‐up and workers' bargaining power parameters according to sector, firm size and period. We find a significant drop in both the mark‐up and the workers' bargaining power in the mid‐1990s. In the second stage, we relate our parameters of interest to trade variables. Our results show that imports from developed countries have significantly contributed to the decrease in both mark‐ups and workers' bargaining power.     

Between Fragmentation and Centralization: South Korean Industrial Relations in Transition

This study investigates profound changes in South Korean industrial relations after the Asian financial crisis of 1997. Korea's neoliberal labour reforms have produced a large number of non‐standard workers, deepening the union representation gap. Realizing that the fragmented enterprise unions could not adequately protect workers from this degradation of labour, trade union leaders began a major organizational drive at the industry level and tried to institutionalize sectoral bargaining. A political space for union centralization was partially opened because the state needed labour's co‐operation to implement neoliberal reform packages. However, disorganized centralization in Korea, where important decisions on wages and working conditions have been negotiated mainly at the company level, has faced limitations in achieving meaningful changes in the dualistic structure of the labour market. This study concludes with a review of changes in Korea's labour law in 2010 and a discussion on the effects of the law on bargaining rights of non‐standard workers and the incipient industry‐level bargaining. This trend towards union centralization may continue, but the notable gap between the formal bargaining structure and actual practice is expected to widen.     

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.     

The Economics of Retailing Formats: Competition Versus Bargaining

We set up a merger game between retailing stores to study the incentives of independent stores to form a big store when some consumers have preferences for one‐stop shopping. Such one‐stop shopping creates complementarity between products, leading in turn to lower prices after a big store is formed but may also lead to an improvement in the bargaining position vis‐à‐vis producers through the creation of an inside option that small stores do not have. We find that big stores will not be formed when the stores' ex ante bargaining power vis‐à‐vis producers is high. Otherwise, an asymmetric situation occurs with only one big store created when one‐stop shoppers are abundant.     

In Whose Interest? A First Look at National Survey Data on Interest‐Based Bargaining in Labor Relations

The first national survey data on interest‐based bargaining (IBB) in labor relations reveal broad awareness of IBB, contrasting union and management views, and variation by negotiator experience and gender. A majority of negotiators are aware of IBB, and approximately one‐third of management negotiators and nearly one‐half of union negotiators report using IBB in prior negotiations. An exploratory analysis of the relationships between IBB preferences and contract outcomes suggests that the process is producing more than a simple “mutual gains” pattern of outcomes. Based on these initial results, two hypotheses are suggested as the focus for future studies of the diffusion and sustainability of IBB in collective bargaining.     

Collective Bargaining and Innovation in Germany: A Case of Cooperative Industrial Relations?

At the level of theory, the effect of collective bargaining on innovation is contested. The large proponderance of the U.S. evidence clearly points to adverse effects, but other‐country experience suggests that certain industrial‐relations systems, or the wider regulatory apparatus, might even tip the balance in favor of unions. Our pooled cross‐ section and difference‐in‐differences estimates provide some weak evidence that German collective bargaining inhibits innovation. However, in conjunction with workplace representation, there is the suggestion that it might actually foster innovative activity.     

Control of intellectual assets in client relationships: implications for innovation

This empirical study of business‐to‐business service firms examines the determinants and effects of control rights to intellectual assets in a property rights theoretic framework. Regression analyses using survey data suggest that service suppliers that retain control over their intellectual output are more innovative. In long‐term relationships, service firms' clients may thus be better off balancing their need to control outsourced activities with the suppliers' incentives to invest in learning and innovation. Additionally, and aligned with property rights theoretic predictions, service suppliers' bargaining power and their indispensability in service projects are positively associated with their ability to retain control rights. In contrast, innovation capabilities are not very significant in determining control rights allocation between service suppliers and their clients. Copyright © 2008 John Wiley & Sons, Ltd.     

Works Councils,Collective Bargaining,and Apprenticeship Training – Evidence From German Firms

In this paper, we investigate the effects of works councils on apprenticeship training in Germany. The German law attributes works councils substantial information and co‐determination rights to training‐related issues. Thus, works councils may also have an impact on the cost‐benefit relation of workplace training. Using detailed firm‐level data containing information on the costs and benefits of apprenticeship training, we find that firms with works councils make a significantly higher net investment in training compared to firms without such an institution. We also find that the fraction of former trainees still employed with the same firm 5 years after training is significantly higher in the presence of works councils, thus enabling firms to recoup training investments over a longer time horizon. Furthermore, all works council effects are much more pronounced for firms covered by collective bargaining agreements.     

The Institutional Context of an ‘Empirical Law’: The Wage Curve under Different Regimes of Collective Bargaining

The wage curve postulates that the wage level is a decreasing function of the regional unemployment rate. In testing this hypothesis, most studies have not taken into account that differences in the institutional framework may have an impact on the existence (or the slope) of a wage curve. Using a large‐scale linked employer–employee dataset for Western Germany, this article provides a first direct test of the relevance of different bargaining regimes (and of works councils) for the existence of a wage curve. In pooled regressions for the period 1998 to 2006, as well as in worker‐level or plant‐level fixed‐effects estimations, we obtain evidence for a wage curve for plants with a collective bargaining agreement at firm level. The point estimates for this group of plants are close to the ?0.1 elasticity of wages with respect to unemployment postulated by Blanchflower and Oswald. In this regime, we also find that works councils dampen the adjustment of wages to the regional unemployment situation. In the other regimes of plants that either do not make use of collective contracts or apply sectoral agreements, we do not find a wage curve.     

Estimating the Wage Premium of Collective Wage Contracts: Evidence from Longitudinal Linked Employer–Employee Data

Using a large‐scale linked employer–employee dataset from western Germany, this paper presents new evidence on the wage premium of collective bargaining contracts. In contrast to previous studies, we seek to assess the extent to which differences in wages between workers in covered and uncovered firms arise from the nonrandom selection of workers and firms into collective bargaining coverage. By measuring the relative wage changes of workers employed in firms that change contract status, we obtain estimates that depart considerably from previous results relying on cross‐sectional data. Results from analyzing separate transitions show that leaving industry‐level contracts is associated with subsequent wage losses. However, the results from a trend‐adjusted difference‐in‐difference approach indicate that particularly the transitions to no coverage appear to be associated with negative shocks. Overall, our findings provide no evidence of a “true” wage effect of leaving wage bargaining, once we account for differences in pretransition wage growth.     

Influences on Trade Union Organizing Effectiveness in Britain

Do British trade unions vary in their effectiveness in maintaining organization and membership in workplaces where they have an established bargaining presence? Do highly developed national union recruitment strategies and innovation in recruitment strategy boost consolidatory organizing and recruitment effectiveness (CORE)? Results suggest that (1) there is some variation in internal organising effectiveness between unions, and (2) national union innovation in recruitment policy is positively associated with internal organizing effectiveness where unions organize blue‐collar workers, but negatively associated with internal organizing effectiveness where unions organize white‐collar workers.     

When do family firms have an advantage in transitioning economies? Toward a dynamic institution‐based view

We advance a dynamic institution‐based view of the firm that extends the theory's current focus on scope of pro‐market reforms (degree of market liberalization in a given year) to consider how speed of reforms (rate of market liberalization achieved over time) affects the performance of firms from transitioning economies. Utilizing a sample of public firms from Chinese provinces with varying reform speeds, we find that while scope of reforms positively impacts firm performance, speed of reforms detracts from firm performance. We further find that while family firms have an advantage in gradually reforming provinces, non‐family firms have an advantage in rapidly reforming provinces. Thus, we extend the institution‐based view across time (speed of reforms) and firms (family vs. non‐family firms). Copyright © 2014 John Wiley & Sons, Ltd.     

Works Councils and Plant Closings in Germany

This paper is the first study to investigate the impact of workplace representation on plant closings in Germany, using data from a nationally representative establishment panel. Across all establishments in our sample, we find evidence of a positive association between works council presence and plant closings. There is the contrary suggestion that industry‐wide collective bargaining plays a neutral to benign role. As for the interaction between collective bargaining and workplace representation, this appears strongest for establishments with fewer than 50 employees: such plants are much more likely to close if they have a works council and are not covered by a collective agreement.     

Can Tightness in the Housing Market Help Predict Subsequent Home Price Appreciation? Evidence from the United States and the Netherlands

This article assesses the predictive power of variables that measure market tightness, such as seller's bargaining power and sale probabilities, on future home prices. Theoretical insights from a stylized search‐and‐matching model illustrate that such indicators can be associated with subsequent home price appreciation. The empirical analysis employs listings data on residential units offered for sale through a real estate broker in the Netherlands and for certain U.S. regions. Individual records are used to construct quarterly home price indices, an index that measures seller's bargaining power and (quality‐adjusted) home sale probabilities. Using conventional time‐series models we show that current sale probabilities and bargaining power can significantly reduce home price appreciation forecast errors and help to predict turning points in local area housing markets. The measures and approaches in this article help to demonstrate ways in which researchers and practitioners can leverage listings data to gain knowledge about the current and future state of the housing market.     

The Impact of Wage‐Setting Institutions on the Incidence of Public Employment in the OECD: 1960–1998

Using data on seventeen Organization for Economic Cooperation and Development (OECD) countries for 1960–1998, this paper studies the impact of unions on public employment incidence, using macro‐ and microdata. Macrodata show that greater coverage by centralized collective bargaining institutions raises the public employment share, controlling for country effects and country‐specific trends. Microdata show that this effect is more positive for outsiders: women, and younger and older men. Thus, government jobs may in effect partially counteract the employment problems these groups face in highly unionized societies.     

Why top management team characteristics matter when employing a chief operating officer: a strategic contingency perspective

Critics of the CEO/COO duo have stressed that this arrangement burdens the firm with increased costs and decreases the CEO's effectiveness. This study adopts an upper echelon perspective to argue that the presence of a COO may also create TMT‐level information‐processing benefits that can improve firm performance in certain conditions. Data from a sample of 153 firms in five industries highlight a strong positive relationship between the presence of a COO and two established measures of firm performance: return on assets and market‐to‐book ratio. The data also suggest that those relationships are contingent on the broader characteristics of the TMT. Copyright © 2009 John Wiley & Sons, Ltd.