From the Fringe to the Fore: Labor Unions and Employee Compensation

2020 ◽  
Vol 102 (1) ◽  
pp. 98-112 ◽  
Author(s):  
Matthew Knepper
Keyword(s):  
Labor Unions ◽  
Multinational Enterprise ◽  
Empirical Literature ◽  
Employee Compensation ◽  
Firm Level ◽  
Apparent Contradiction ◽  
Labor Share ◽  
Level Data ◽  
Union Election ◽  
Enterprise Survey

Conventional wisdom suggests that labor unions raise worker wages, while the newer empirical literature finds only negligible earnings effects. I reconcile this apparent contradiction by arguing that collective bargaining targets fringe benefits. Using U.S. firm-level data from the Bureau of Economic Analysis (BEA) Multinational Enterprise Survey and Compustat, I exploit a regression discontinuity in majority rule union elections to compare changes in employee compensation at firms whose establishment barely won a union election against those that barely lost an election. Following unionization, average employee compensation and employer pension contributions increase, which raises the labor share of compensation.

Do Labor Unions Always Lead to Underinvestment?

2016 ◽  
Vol 29 (1) ◽  
pp. 45-66 ◽  
Author(s):  
Hyungjin Cho ◽  
Bryan Byung-Hee Lee ◽  
Woo-Jong Lee ◽  
Byungcherl Charlie Sohn
Keyword(s):  
Labor Unions ◽  
Labor Union ◽  
Agency Problems ◽  
Investment Efficiency ◽  
Minority Shareholders ◽  
Firm Level ◽  
Negative Relation ◽  
Level Data ◽  
Firm Level Data ◽  
Jel Classifications

ABSTRACT We examine the relation between labor union strength and investment efficiency using the comprehensive firm-level data of Korean-listed companies. We find that the perceived underinvestment related to unionization documented in previous studies is attributable to a negative relation between union strength and investment in overinvesting firms. In fact, union strength is positively related to the level of investment in underinvesting firms. We further find that the relation between union strength and investment efficiency is more pronounced for chaebol firms where inefficient investments are more likely due to greater agency problems between the controlling and minority shareholders. Finally, we document that the investment has more positive value implications in firms with a stronger union. Our results suggest that unions play an important role as a nonfinancial stakeholder in curbing inefficient investments. JEL Classifications: G30; G31; J53; J54; M41; M54.

scholarly journals Offshoring and Labor Markets

2018 ◽  
Vol 56 (3) ◽  
pp. 981-1028 ◽  
Author(s):  
David Hummels ◽  
Jakob R. Munch ◽  
Chong Xiang
Keyword(s):  
Labor Markets ◽  
Policy Implications ◽  
Empirical Literature ◽  
Firm Level ◽  
Intermediate Inputs ◽  
Level Data ◽  
Wage Effects ◽  
Wage Employment ◽  
Firm Data ◽  
Industry Level Data

In this paper, we survey the recent empirical literature on the effects of offshoring on wage, employment, and displacement. We start with an overview of the measurement of offshoring, organizing our discussion around the three key elements of offshoring: that it involves intermediate inputs for production (versus final goods for consumption); that it involves imported inputs (versus domestically produced ones); and that the inputs involved could have been produced internally within the same firm. We then briefly discuss the theories of offshoring and survey the literature that examines the wage effects of offshoring: the wave of studies using industry-level data; the wave using firm-level data; the wave using worker-level data; and the wave using matched worker-firm data. For each wave, we highlight the identification strategies used, critically assess its strengths and weaknesses, discuss its connections with theory, and draw out potential policy implications of its findings. Finally, we survey the literature that examines how offshoring affects employment and displacement. We highlight the recent development of a novel cohort-based approach that is specifically designed to address selection with displacement, and capable of identifying the overall effects of offshoring, including wage, displacement, and all other types of transitions. (JEL F23, J24, J31, J63, L24, M55)

scholarly journals From Micro to Macro: A Note on the Analysis of Aggregate Productivity Dynamics Using Firm-Level Data

2021 ◽  
Vol 2021 (1314) ◽  
pp. 1-36
Author(s):  
Daniel A. Dias ◽  
◽  
Carlos Robalo Marques ◽  
Keyword(s):  
Labor Productivity ◽  
Productivity Growth ◽  
Empirical Literature ◽  
Aggregate Productivity ◽  
Firm Level ◽  
Level Data ◽  
Firm Level Data ◽  
The Mean ◽  
Productivity Dynamics

In the empirical literature, the analysis of aggregate productivity dynamics using firm-level productivity has mostly been based on changes in the mean of log-productivity. This paper shows that there can be substantial quantitative and qualitative differences in the results relative to when the analysis is based on changes in the mean of productivity, and discusses the circumstances under which such differences are likely to happen. We use firm-level data for Portugal for the period 2006-2015 to illustrate the point. When the mean of productivity is used, we estimate that TFP and labor productivity for the whole economy increased by 17.7 percent and 5.2 percent, respectively, over this period. But, when the mean of log-productivity is used, we estimate that these two productivity measures declined by 4.3 percent and 1.8 percent, respectively. Similarly disparate results are obtained for productivity decompositions regarding the contributions for productivity growth of surviving, entering and exiting firms.

Estimations of business exposure to corruption in Malaysia

2020 ◽  
Vol 27 (4) ◽  
pp. 1273-1287
Author(s):  
Selamah Abdullah Yusof ◽  
Mohd Nahar Mohd Arshad
Keyword(s):  
Design Methodology ◽  
Public Officials ◽  
Firm Level ◽  
Content Type ◽  
Business Operations ◽  
The World Bank ◽  
Level Data ◽  
Firm Level Data ◽  
Binary Logit ◽  
Enterprise Survey

Purpose This study aims to investigate the level of business exposure to corruption in Malaysia. The authors estimate the effect of bribe requests from business establishments by public officials and identify the level of vulnerability of businesses to such requests. Design/methodology/approach This study uses firm-level data from the World Bank Malaysia Enterprise Survey 2014. The analyses are based on binary logit, tobit and generalized ordered logit regressions. Findings The authors find that one-fifth of firms applying for construction permits or had visits or meetings with tax officials were expected to pay bribes. Firms’ encounters with corruption were higher still when applying for import (29%) or operating license (24.7%). About 40% of the firms considered corruption an obstacle to their business operations to the degree of moderate, major and even severe. On average, 11% of firms’ total annual sales were apportioned for informal gifts or “speed money.” The authors also find that larger, younger and women-managed/owned companies were more likely to be targeted for bribe payments. The amount of bribe paid by foreign-owned firms was higher than the local firms. Manufacturing firms had lower incidences of bribe requests, but the amount paid was higher than services-related companies. Firms run or owned by women also, on average, paid a higher amount bribe. Social implications These findings should be taken into consideration in the efforts to eradicate corruption affecting businesses in Malaysia. Originality/value This study is unique in the sense that it is based on firm-level data for a Malaysian case.

scholarly journals Global Production with Export Platforms*

2016 ◽  
Vol 132 (1) ◽  
pp. 157-209 ◽  
Author(s):  
Felix Tintelnot
Keyword(s):  
General Equilibrium ◽  
Host Country ◽  
Foreign Investment ◽  
Multinational Firms ◽  
Multinational Enterprise ◽  
Fixed Costs ◽  
Firm Level ◽  
Level Data ◽  
Multinational Production ◽  
Foreign Affiliates

Abstract Most international commerce is carried out by multinational firms, which use their foreign affiliates both to serve the market of the host country and to export to other markets outside the host country. In this article, I examine the determinants of multinational firms’ location and production decisions and the welfare implications of multinational production. The few existing quantitative general equilibrium models that incorporate multinational firms achieve tractability by assuming away export platforms—that is, they do not allow foreign affiliates of multinationals to export—or by ignoring fixed costs associated with foreign investment. I develop a quantifiable multicountry general equilibrium model, which tractably handles multinational firms that engage in export platform sales and that face fixed costs of foreign investment. I first estimate the model using German firm-level data to uncover the size and nature of costs of multinational enterprise and show that the fixed costs of foreign investment are large. Second, I calibrate the model to data on trade and multinational production for twelve European and North American countries. Counterfactual analysis reveals that multinationals play an important role in transmitting technological improvements to foreign countries and that the pending Canada-EU trade and investment agreement could divert a sizable fraction of the production of EU multinationals from the U.S. to Canada.

scholarly journals Exporters in Pakistan and Firms Who Do Not Export: What’s the Big Difference?

2014 ◽  
Vol 19 (Special Edition) ◽  
pp. 207-246
Author(s):  
Theresa Chaudhry ◽  
Muhammad Haseeb
Keyword(s):  
Cross Sections ◽  
Capital Intensity ◽  
Export Market ◽  
Stylized Facts ◽  
Firm Level ◽  
Level Data ◽  
Firm Level Data ◽  
World Bank Enterprise Survey ◽  
Enterprise Survey ◽  
New Literature

A variety of stylized facts about exporters have emerged in the new literature on international trade based on firm-level data. These include low levels of export participation among firms; small shares of export sales in firm revenue; larger firms; and higher levels of productivity, skill, and capital intensity among exporters. In this paper, we seek to examine the extent to which these stylized facts fit the experience of firms in Pakistan, using two cross-sections of firm-level data—the Census of Manufacturing Industries (CMI) 2000/01 for Punjab and the World Bank Enterprise Survey dataset (2006/07) for all Pakistan. We find similar levels of export market participation but very large shares of export sales in firm revenue for those who do, compared to the US sample studied by Bernard, Jensen, Redding, and Schott (2007). We also find, as do many other studies, that exporters exhibit significantly higher total factor productivity (TFP) and are larger in terms of employment than nonexporters. Exporters’ TFP was 150 percent higher than non-exporters before we controlled for firm size. Considering the eight largest sectors (which comprise more than 80 percent of the CMI Punjab), with a few exceptions, exporters had higher labor productivity and offered higher compensation to workers, but used more capital per worker and more imported inputs.

Does external auditing combat corruption? Evidence from private firms

2018 ◽  
Vol 33 (3) ◽  
pp. 267-287 ◽  
Author(s):  
Omar Farooq ◽  
Nermeen F. Shehata
Keyword(s):  
Financial Statements ◽  
Total Sample ◽  
Firm Level ◽  
Content Type ◽  
The World Bank ◽  
Level Data ◽  
World Bank Enterprise Survey ◽  
Enterprise Survey ◽  
The Relationship ◽  
Practical Implications

Purpose This paper aims to document whether firms with audited financial statements pay lower bribes to get contracts than firms without audited financial statements. In other words, this study assesses whether external auditing helps combat corruption. Design/methodology/approach The World Bank Enterprise Survey data covering the period between 2006 and 2014 is used. The total sample comprised more than 50,000 firms in 126 countries. Findings This paper finds that firms with audited financial statements pay significantly lower bribes compared to firms with unaudited financial statements. The results are robust across various estimation procedures, various proxies for bribery and various sub-samples. It is also found that the relationship between audited financial statements and bribery is more pronounced in environments where firms face higher pressure to engage in corrupt practices. Practical implications The results imply that auditing of financial statements can act as a disciplining device to curb bribery in environments that encourage corruption. Originality/value This paper is the first attempt, according to the authors’ knowledge, to examine the relationship between external auditing and corruption using firm-level data that cover 126 countries and is gathered over a 14-year period. Therefore, the results derived from this study are generalizable.

scholarly journals State capitalism, economic systems and the performance of state owned firms

2019 ◽  
Vol 69 (s1) ◽  
pp. 175-193
Author(s):  
Saul Estrin ◽  
Zhixiang Liang ◽  
Daniel Shapiro ◽  
Michael Carney
Keyword(s):  
Research Question ◽  
Empirical Support ◽  
Economic Systems ◽  
Firm Level ◽  
Level Data ◽  
Context Specific ◽  
World Bank Enterprise Survey ◽  
Enterprise Survey ◽  
Privately Owned ◽  
Better Than

In this paper, we pursue two related research questions. First, we enquire whether state owned enterprises (SOEs) perform better than privately owned firms in a large variety of emerging markets. To test this, we develop a unique dataset using firm-level data from the World Bank Enterprise Survey (WBES), resulting in a sample of over 50,000 firms from 57 understudied countries including emerging capitalist, former socialist and state capitalist ones. Our results suggest that SOEs do display productivity advantages over private firms in these understudied economies. Our second research question asks whether the performance of state owned firms in these understudied countries is context specific, namely whether performance depends on the institutional system into which a country is classified. We refer to these systems as configurations. In particular, we are interested in whether state owned firms perform better in “state capitalist” countries including China and Vietnam. We find empirical support for the argument that the “state-led” configuration provides better institutional support for the ownership advantages of SOEs than others.

scholarly journals Arbitrage spaces in the offshore world: Layering, ‘fuses’ and partitioning of the legal structure of modern firms

2021 ◽  
pp. 0308518X2110536
Author(s):  
Ronen Palan ◽  
Hannah Petersen ◽  
Richard Phillips
Keyword(s):  
Legal Theory ◽  
Group Structure ◽  
Multinational Enterprise ◽  
Theory Of The Firm ◽  
Firm Level ◽  
Legal Structure ◽  
Level Data ◽  
Social Technologies ◽  
Ownership Arrangement ◽  
Social Geographies

In this article, we discuss the way offshore financial centres are used by the multi-subsidiary, multi-jurisdictional group structure known as the ‘multinational enterprise’ to arbitrage between social geographies of political jurisdictions. We define arbitrage as the use of corporate legal entities located in diverse jurisdictions to arbitrate a third country's rules and regulations. Using a new method to categorize firm-level data from Van Dijk’s Orbis, we operationalize the notion of arbitrage to systematically detail and compare the structural sequencing choices firms are making, likely in part for reasons of arbitrage. We base our techniques on legal theory of the firm, acknowledging the underpinning of social technologies of law and accounting by which business enterprises are constructed and maintained. We conclude that two specific types of entities, ‘standalones’ versus ‘in-betweeners’, are qualitatively different from others in the activities they perform. We also highlight the existence of liability structures, or ‘fuses’, which typically take the form of a split ownership arrangement. Ultimately, we demonstrate that the position of a firm’s subsidiary within the overall network ecology of that firm is as important as its jurisdictional registration location.

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