Temporary Employment, Demand Volatility, and Unions: Firm-Level Evidence

This article investigates the effect of workplace unionization and product market volatility on firms’ propensity to use temporary employment. Using Italian firm-level data, the authors show that volatility has a positive impact on the share of temporary contracts. The baseline estimates for the impact of unions are inconclusive, but a clear pattern emerges when a specification including an interaction term with volatility is used. This approach allows a richer characterization of the impact of workplace unionization, which is positive for low levels of volatility and negative for high levels. The authors discuss various direct and indirect mechanisms to explain this novel finding. Furthermore, they find that these effects hold only for cases in which the employer does not provide training for temporary workers, whereas temporary contracts with training provisions are not affected by unions, volatility, and their interplay.

Download Full-text

Firm-level agreements, employment strategies and temporary workers

Employee Relations ◽

10.1108/er-01-2019-0062 ◽

2020 ◽

Vol 42 (1) ◽

pp. 194-212

Author(s):

Saverio Minardi

Keyword(s):

Fixed Effects ◽

Selection Process ◽

Temporary Employment ◽

Least Square ◽

Temporary Workers ◽

Firm Level ◽

Data Set ◽

Content Type ◽

Collective Agreements ◽

The Impact

Purpose The purpose of this paper is to investigate the impact of two-tier firm-level collective agreements on firms’ propensity to use temporary employment, accounting for the process of self-selection of firms into different bargaining levels in the Italian context. It further examines which firm-level characteristics drive this process of selection. Design/methodology/approach The empirical analysis uses a panel data set of Italian firms for the years 2005, 2007, 2010 and 2015. Estimations are produced and compared through ordinary least square regression, random-effects and fixed-effects models. Findings Results show that enterprises adopting two-tier firm-level agreements (TTFA) are associated with lower levels of temporary workers. However, a longitudinal analysis suggests that introducing a TTFA does not impact firms’ propensity to employ temporary workers. This novel finding highlights the presence of a selection process based on firm-level time-constant characteristics. The paper argues that these characteristics refer to management orientation toward high-road rather than low-road employment strategies. Further evidence is brought in support of this claim, showing that firms’ propensity toward the provision of training for their labor force partially explain the process of selection. Originality/value The study is the first to analyze the impact of secondary-level collective agreements on firms’ reliance on temporary employment, offering new evidence on the causes of the expansion of temporary employment. It further highlights the relevance of employers’ strategies in shaping the impact of the bargaining structure.

Download Full-text

Firms’ Adjustments to Employment Protection Legislation: Evidence from South Korea

ILR Review ◽

10.1177/0019793917728720 ◽

2017 ◽

Vol 71 (3) ◽

pp. 733-759 ◽

Cited By ~ 2

Author(s):

Jisun Baek ◽

WooRam Park

Keyword(s):

South Korea ◽

Negative Impact ◽

Employment Protection ◽

Employment Protection Legislation ◽

Temporary Workers ◽

Firm Level ◽

Employment Level ◽

Temporary Contracts ◽

Protection Legislation ◽

The Impact

The authors examine the impact of employment protection legislation on firm-level outcomes such as employment and profitability in South Korea. The 2007 Act on the Protection of Temporary Workers restricted the use of specific types of temporary contracts to a period of two years. Exploiting the fact that the impact of the reforms was greater for establishments that intensively used the affected temporary workers, the authors apply a difference-in-differences framework. Their results show that businesses responded to the Act by reducing the use of temporary contracts protected by the reforms and partially substituting them with permanent and other unprotected temporary contracts. As a result, the reform decreased overall employment level of establishments. Furthermore, the authors find that the newly introduced regulations had a limited negative impact on firms’ profitability. Evidence suggests that establishments also improved their capital intensity and their labor productivity in response to the labor reform.

Download Full-text

BUSINESS UNCERTAINTY AND THE EFFECTIVENESS OF FISCAL POLICY IN GERMANY

Macroeconomic Dynamics ◽

10.1017/s1365100517000281 ◽

2017 ◽

Vol 23 (4) ◽

pp. 1442-1470 ◽

Cited By ~ 1

Author(s):

Tim Oliver Berg

Keyword(s):

Fiscal Policy ◽

Positive Impact ◽

Structural Vector Autoregression ◽

Business Climate ◽

Firm Level ◽

State Dependent ◽

Long Run ◽

Level Data ◽

Short Run ◽

The Impact

There are suggestions that increased uncertainty makes fiscal policy temporarily less effective. In this paper, I examine the relationship between business uncertainty and fiscal policy effectiveness in Germany. I use measures of business uncertainty that are derived from the firm-level data of the Ifo Business Climate Survey and interact them with the parameters of a structural vector autoregression to produce state-dependent spending multipliers. The impact of increased uncertainty on the spending multiplier is generally small and often statistically not significant in the short run. By contrast, I obtain a significant positive impact on the long-run multiplier. These baseline results are supported by a variety of robustness checks and specifications.

Download Full-text

Bank concentration and SME financing availability: the impact of promotion of financial inclusion in China

International Journal of Bank Marketing ◽

10.1108/ijbm-01-2020-0007 ◽

2020 ◽

Vol 38 (6) ◽

pp. 1329-1349

Author(s):

Zhiqiang Lu ◽

Junjie Wu ◽

Jia Liu

Keyword(s):

Positive Impact ◽

Substitution Effect ◽

Financial Inclusion ◽

Firm Level ◽

Content Type ◽

Level Data ◽

The Impact ◽

The Relationship ◽

Bank Concentration ◽

Sme Financing

PurposeThe promotion of financial inclusion can disturb the composition of traditional bank concentration and change the relationship between bank concentration and the availability of small and medium-sized enterprise (SME) financing. This paper concentrates on a less frequently explored area of research by examining the relationships between bank concentration, financial inclusion and SME financing availability respectively, and the interaction between bank concentration and financial inclusion after the implementation of a financial inclusion strategy in China.Design/methodology/approachUsing firm-level data from 1,509 listed SMEs in China from 2007 to 2017 and applying rigorous analyses, we identify how bank concentration affects SME financing availability under the promotion of financial inclusion and also the mechanisms involved.FindingsWe find that bank concentration and financial inclusion respectively have positive impacts on the credit available to listed SMEs, indicating that the promotion of financial inclusion in China has reached a new high watermark. The positive impact of bank concentration is reduced when the level of financial inclusion is high. Conversely, a higher level of financial inclusion favours SME credit availability at only a low degree of bank concentration. Our findings suggest that financial inclusion has a substitution effect on bank concentration and has enabled us to add new interpretations to relevant theories; namely, the Market Power and Information Theories respectively.Originality/valueThis study provides new insights into the relationship between bank concentration and SME finance availability under the promotion of financial inclusion.

Download Full-text

The Impact of Service Liberalization on Manufacturing Productivity in Indonesia

Jurnal Ekonomi Pembangunan ◽

10.29259/jep.v19i1.12613 ◽

2021 ◽

Vol 19 (1) ◽

pp. 1-16

Author(s):

Wulan Oktabriyantina ◽

Maddaremmeng Andi Panennungi

Keyword(s):

Instrumental Variables ◽

Service Sector ◽

Positive Impact ◽

Fixed Effect Model ◽

Service Market ◽

Firm Level ◽

Effect Model ◽

Level Data ◽

Manufacturing Productivity ◽

The Impact

This study examined the impact of service liberalization on manufacturing productivity firms in Indonesia through mode three (commercial presence) during 2006–2014. It used firm-level data sourced from the manufacturing census published by the Indonesian Bureau of Statistic (BPS). To address the problem of endogeneity in service reform, this research uses an Instrumental Variables (IV) estimation of the fixed-effect model variety and utilized two types of data (FDI and STRI OECD) to compare the result. The findings show that service liberalization in Indonesia has a positive impact on manufacturing productivity at the firm level. Furthermore, this study estimates each service sector (e.g., electricity, gas, and water; construction; transportation, warehouse, and telecommunication), the results indicated that each service had a significant impact on improving firm performance. This research suggests that reducing restrictions on the service market will improve manufacturing productivity.

Download Full-text

Are female leaders more efficient in family firms than in non-family firms?

Corporate Governance ◽

10.1108/cg-01-2017-0017 ◽

2018 ◽

Vol 18 (2) ◽

pp. 185-205 ◽

Cited By ~ 7

Author(s):

Per-Olof Bjuggren ◽

Louise Nordström ◽

Johanna Palmberg

Keyword(s):

Family Firms ◽

Positive Impact ◽

Female Leadership ◽

Female Leaders ◽

Firm Level ◽

Content Type ◽

Corporate Leaders ◽

Listed Firms ◽

Level Data ◽

The Impact

Purpose The aim of this study is to investigate whether female leaders are more efficient in family firms than in non-family firms. Design/methodology/approach This paper uses a unique database of ownership and leadership in private Swedish firms that makes it possible to analyze differences in firm performance due to female leadership in family and non-family firms. The analysis is based on survey data merged with micro-level data on Swedish firms. Only firms with five or more employees are included in the analysis. The sample contains more than 1,000 firms. Findings The descriptive statistics show that there are many more male than female corporate leaders. However, the regression analysis indicates that female leadership has a much more positive impact on the performance of family firms than on that for non-family firms, where the effect is ambiguous. Originality/value Comparative studies examining the impact of female leadership on firm-level performance in family and non-family firms are rare, and those that exist are most often either qualitative or focused on large, listed firms. By investigating the role of female directors in family and non-family firms, the study adds to the literature on management, corporate governance and family firms.

Download Full-text

Impact of Determinants of Industrial Development on Employment and Wages in Indian Manufacturing

Indian Journal of Economics and Development ◽

10.35716/ijed/19053 ◽

2020 ◽

pp. 18-30

Keyword(s):

Technical Efficiency ◽

Total Factor Productivity ◽

Technical Change ◽

Positive Impact ◽

Manufacturing Sector ◽

Factor Productivity ◽

Firm Level ◽

Employment Level ◽

The Impact ◽

Level Performance

ABSTRACT The present study was undertaken to explore the evolution of the impact of firm-level performance on employment level and wages in the Indian organized manufacturing sector over the period 1989-90 to 2013-14. One of the major components of the economic reform package was the deregulation and de-licensing in the Indian organized manufacturing sector. The impact of firm-level performance on employment and wages were estimated for Indian organized manufacturing sector in major sub-sectors in India during the period from 1989-90 to 2013-14 of the various variables namely profitability ratio, total factor productivity change, technical change, technical efficiency, openness (export-import), investment intensity, raw material intensity and FECI in total factor productivity index, technical efficiency, and technical change. The study exhibited that all explanatory variables except profitability ratio and technical change cost had a positive impact on the employment level. Out of eight variables, four variables such as net of foreign equity capital, investment intensity, TFPCH, and technical efficiency change showed a positive impact on wages and salary ratio and rest of the four variables such as openness intensity, technology acquisition index, profitability ratio, and technical change had negative impact on wages and salary ratio. In this context, the profit ratio should be distributed as per the marginal rule of economics such as the marginal productivity of labour and capital.

Download Full-text

The Impact of the Business Environment on the Formalization of Informal Firms. The Case of Kosovo

Südosteuropa ◽

10.1515/soeu-2020-0035 ◽

2020 ◽

Vol 68 (4) ◽

pp. 505-529

Author(s):

Kujtim Zylfijaj ◽

Dimitar Nikoloski ◽

Nadine Tournois

Keyword(s):

Negative Impact ◽

Positive Impact ◽

Business Environment ◽

Positive Influence ◽

Policy Implications ◽

Tax Reforms ◽

Firm Level ◽

Characteristics Analysis ◽

Significant Negative Impact ◽

The Impact

AbstractThe research presented here investigates the impact of the business environment on the formalization of informal firms, using firm-level data for 243 informal firms in Kosovo. The findings indicate that business-environment variables such as limited access to financing, the cost of financing, the unavailability of subsidies, tax rates, and corruption have a significant negative impact on the formalization of informal firms. In addition, firm-level characteristics analysis suggests that the age of the firm also exercises a significant negative impact, whereas sales volume exerts a significant positive impact on the formalization of informal firms. These findings have important policy implications and suggest that the abolition of barriers preventing access to financing, as well as tax reforms and a consistent struggle against corruption may have a positive influence on the formalization of informal firms. On the other hand, firm owners should consider formalization to be a means to help them have greater opportunities for survival and growth.

Download Full-text