Trade and unions: Does size matter? |
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| Affiliation: | 1. Institute for Employment Studies (IES), UK;2. Institute for Employment Research (IAB), Germany;3. University of Hagen, Germany;4. CESifo, Germany;1. CNRS, IÉSEG School of Management, Univ. Lille, UMR 9221 - LEM, 3 Rue de la Digue, F-59000, Lille, France;2. University of Illinois at Chicago, IÉSEG School of Management, 757 Sphpi, M/c 923, 1603 W. Taylor St, Chicago, IL 60612, USA;3. IÉSEG School of Management, Univ. Lille, UMR 9221 - LEM, 3 Rue de la Digue, F-59000, Lille, France;1. WHU - Otto Beisheim School of Management, Burgplatz 2, 56179, Vallendar, Germany;2. EBS Business School, Burgstraße 5, 65375, Oestrich-Winkel, Germany;1. Department of Business Administration, Athens University of Economics and Business, 76 Patission Street, GR-10434, Athens, Greece;2. IPAG Business School, 184 Boulevard Saint-Germain, FR-75006, Paris, France;3. Centre for Planning and Economic Research, 11 Amerikis Street, GR-10672, Athens, Greece |
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| Abstract: | Our empirical analysis builds upon the hypothesis that unions are detrimental to a firm's efficiency. Using a rich survey of German manufacturers, we investigate firm-level determinants on the probability of collective wage bargaining with particular focus on the impact of a firm's engagement in foreign markets. An interesting and very robust finding is that exporters are less likely to engage in union wage bargaining. This finding is in line with a pessimistic perception of unions. The negative effect of collective bargaining can be offset by efficiency gains for larger exporters, who can benefit from operation cost saving effects. Size does matter as larger firms export and may find bargaining with a single entity representing the workforce more convenient than bargaining with each worker individually. We are using firm level information on IT investment as instrument for the export dummy and successfully test for the validity of this instrument. |
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| Keywords: | trade Unions Exports Firm level data F16 J51 E24 J3 |
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