Wage Cyclicality Under Different Regimes of Industrial Relations

We analyze the effect of collective wage agreements and of works councils on the cyclicality of real wages. Using employer–employee data for western Germany (1995–2004), we find that wage adjustments to positive and negative shocks are generally not symmetric. Wage growth increases in all industrial relations regimes when unemployment is falling, but this inverse relationship is weaker when unemployment is rising. Moreover, in plants with individual‐level bargaining, wages do not adjust at all to rising unemployment. Works councils increase wage growth only in firms covered by sectoral agreements, but they do not affect the cyclicality of wages.     

Establishment exits in Germany: the role of size and age

Using comprehensive data for West Germany, this paper investigates the determinants of establishment exit. We find that between 1975 and 2006 the average exit rate has risen considerably. In order to test various “liabilities” of establishment survival identified in the literature, we analyzed the impact of establishment size and put a special focus on differences between young and mature establishments. Our empirical analysis shows that the mortality risk falls with establishment size, which confirms the liability of smallness. The probability of exit is substantially higher for young establishments which are not more than 5 years old, thus confirming the liability of newness. There also exists a liability of aging since exit rates first decline over time, reaching a minimum at ages 15–18, and then rise again somewhat. The determinants of exit differ substantially between young and mature establishments, suggesting that young establishments are more vulnerable in a number of ways.     

Applying the door-in-the-face compliance technique to retailing

The door-in-the-face (DITF) approach, a sequential compliance technique in which a large request is followed by a more moderate request, has been shown to increase compliance in a variety of non-business situations. The aim of this study is to investigate whether the DITF technique could also be used to increase sales in a retailing context. A field experiment outside an alpine hut was conducted. A total of 375 consumers participated in the experiment. As they passed by the entrance to the mountain hut, they were approached by an experimenter who invited them to buy some home-made cheese. In the experimental groups the DITF technique was used by the salesperson. The results show that the DITF technique can lead to a significant increase in the number of consumers making a purchase. Furthermore, it was found that this compliance technique is even more effective when it is used by a highly credible seller and when the seller points out that the more moderate request constitutes a concession. The large effect of the DITF intervention (the number of consumers making a purchase increased 15 to 40 percentage points over the control group) suggests that this technique could be used successfully in retailing.     

Rezensionen

Ohne Zusammenfassung     

Works councils in Germany: their effects on establishment performance

Works councils are the most important pillar of workplace industrialrelations in Germany but little is known of their economic effects.The paper uses a modern, large-scale dataset to examine thisissue. Consonant with recent applied theoretical conjectures,it is found that works councils are associated with reducedlabour fluctuation, higher productivity (in larger establishmentsonly), and no reduction in innovative activity. Yet they arealso associated with lower profitability and higher wages. Thisconcatenation of results, although not inconsistent with efficiency,underscores the need for closer investigation of the institutiongiven actual and prospective EU works council mandates.     

SOCIAL INDICATORS—SYSTEMS, METHODS AND PROBLEMS

Professor Moser regards the purpose of social indicators as being to aid the policy maker by summarizing the state and changing conditions of society, pinpointing the outstanding existing and emerging social problems and monitoring the effects of social policies and programmes. Thus social indicators will frequently, though not necessarily, be normative and they will often, though again not necessarily, be concerned with outputs rather than inputs. Although many writers regard social indicators as being combinations of series, the problems of construction are substantial. Central to the idea of a social indicator, however, is that it should represent or summarize a broader concept than itself and that it should belong to a structure or system of series. Although there are no social theories about society in general on which a structure of indicators can at present be based there are a number of middle range theories relating to specific fields or sectors, such as occupational mobility, education, migration, mental health, etc., around which quantitative relationships and models can gradually be be built to give insight into social changes and perhaps eventually into the manipulation of policy instruments for the improvement of social conditions.     

Entitling the Pollutee: Liability versus Standard under Private Information

This paper considers and compares two different legal means -- full liability and standard – to reduce and to regulate pollution at a local level accounting for private information about benefits and costs. The familiar polluter pays principle makes the polluter liable for any damage. Since the courts lack information about the true damage the pollutee can and presumably will overstate this damage. Nevertheless, voluntary arrangements bypassing the courts exist (e.g., for Coasean reasons). However, such out-of court arrangements fail to improve in many cases the inefficient allocation of pollution due to agency costs. Given these unsatisfactory consequences of the polluter pays principle even after allowing for contracts around the law, we propose a modification of standards: the pollutee is entitled that a certain standard is satisfied, yet can trade this right for financial compensations. Contracts induced by this legal rule are countervailing (the optimal mechanism switches between subsidies and payments and first best efficiency holds at both ends) and this characteristic allows such a privatized standard to track the first best quite well and (often) better than the polluter pays principle. This relative ranking under private information is the opposite of the one that holds under uncertainty (here liability dominates the standard).JEL classification: D62, D82     

The Relation Between Policies Concerning Corporate Social Responsibility (CSR) and Philosophical Moral Theories – An Empirical Investigation

This article examines the relation between policies concerning Corporate Social Responsibility (CSR) and philosophical moral theories. The objective is to determine which moral theories form the basis for CSR policies. Are they based on ethical egoism, libertarianism, utilitarianism or some kind of common-sense morality? In order to address this issue, I conducted an empirical investigation examining the relation between moral theories and CSR policies, in companies engaged in CSR. Based on the empirical data I collected, I start by suggesting some normative arguments used by the respondents. Secondly, I suggest that these moral arguments implicitly rely on some specific moral principles, which I characterise. Thirdly, on the basis of these moral principles, I suggest the moral theories upon which the CSR policies are built. Previous empirical studies examining the relation between philosophical moral theories and the ethical content of business activities have mainly concentrated on the ethical decision-making of managers. Some of the most prominent investigations in that regard propose that managers mainly act in accordance with utilitarian moral theory (Fritzsche, D. J. and H. Becker: 1984, Academy of Management Journal 27(1), 166–175; Premeaux, S. and W. Mony: 1993, Journal of Business Ethics 12, 349–357; Premeaux, S.: 2004, Journal of Business Ethics 52, 269–278). I conclude that CSR policies are not based on utilitarian thinking, but instead, on some kind of common-sense morality. The ethical foundation of companies engaged in CSR, thus, does not mirror the ethical foundation of managers.