IDEAS home Printed from https://ideas.repec.org/p/hal/cesptp/hal-01502777.html
   My bibliography  Save this paper

Labour Relations Quality and Productivity: an Empirical Analysis on French Firms

Author

Listed:
  • Gilbert Cette

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, Centre de recherche de la Banque de France - Banque de France)

  • Nicolas Dromel

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Rémy Lecat

    (Centre de recherche de la Banque de France - Banque de France)

  • Anne-Charlotte Paret

    (ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique, Centre de recherche de la Banque de France - Banque de France)

Abstract

We empirically characterise how good labour relations can alleviate the negative impact on productivity of regulatory constraints or workforce opposition. The estimates are based on a unique survey of French manufacturing firms collected by the Banque de France over the period 1991-2008. Our main results may be summarised as follows:i) ‘workforce or union opposition' interacted with ‘regulatory constraints' has a negative significant impact on total factor productivity (TFP). When this interaction is not taken into account, a deteriorated labour climate, through workforce or union opposition, weighs directly on TFP. But when this interaction is taken into account, this negative impact relies solely on the combination of regulatory constraints and labour opposition: workers or unions can successfully oppose management's decisions and weigh on TFP when they can use or threaten to use appropriate regulation; otherwise, their opposition may be harmless;ii) ‘regulatory constraints' interacted with ‘branch or firm agreement' has a positive significant impact on TFP. These agreements, which can only be obtained if labour relations are supportive, would be used by firms to offset the negative impact of regulatory constraints. This favourable impact can be obtained through two channels: first, informally, a good labour climate can lead to a flexible implementation of regulation; second, formally, the French labour code incorporates provisions that allow firm or branch agreements to adapt or even alleviate the constraints of regulation. These results emphasise that the implementation of regulatory constraints and their impact on productivity crucially hinges on the quality of labour climate.

Suggested Citation

  • Gilbert Cette & Nicolas Dromel & Rémy Lecat & Anne-Charlotte Paret, 2013. "Labour Relations Quality and Productivity: an Empirical Analysis on French Firms," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01502777, HAL.
    • Handle: RePEc:hal:cesptp:hal-01502777
    DOI: 10.5202/rei.v4i2.124
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Richard B. Freeman & Edward P. Lazear, 1995. "An Economic Analysis of Works Councils," NBER Chapters, in: Works Councils: Consultation, Representation, and Cooperation in Industrial Relations, pages 27-52, National Bureau of Economic Research, Inc.
    2. Gilbert Cette & Nicolas Dromel & Rémy Lecat & Anne-Charlotte Paret, 2015. "Production Factor Returns: The Role of Factor Utilization," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 134-143, March.
    3. Harry C. Katz & Thomas A. Kochan & Jeffrey H. Keefe, 1987. "Industrial Relations and Productivity in the U.S. Automobile Industry," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 685-728.
    4. Addison, John T & Schnabel, Claus & Wagner, Joachim, 2001. "Work Councils in Germany: Their Effects on Establishment Performance," Oxford Economic Papers, Oxford University Press, vol. 53(4), pages 659-694, October.
    5. Philippe Aghion & Yann Algan & Pierre Cahuc, 2011. "Civil Society And The State: The Interplay Between Cooperation And Minimum Wage Regulation," Journal of the European Economic Association, European Economic Association, vol. 9(1), pages 3-42, February.
    6. Morikawa, Masayuki, 2010. "Labor unions and productivity: An empirical analysis using Japanese firm-level data," Labour Economics, Elsevier, vol. 17(6), pages 1030-1037, December.
    7. John T. Addison, 2005. "The Determinants Of Firm Performance: Unions, Works Councils, And Employee Involvement/High‐Performance Work Practices," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(3), pages 406-450, July.
    8. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    9. Olaf Hübler & Uwe Jirjahn, 2003. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(4), pages 471-491, September.
    10. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
    11. David Fairris & Philippe Askenazy, 2010. "Works Councils and Firm Productivity in France," Journal of Labor Research, Springer, vol. 31(3), pages 209-229, September.
    12. John Addison & Stanley Siebert & Joachim Wagner & Xiangdong Wei, 2000. "Worker Participation and Firm Performance: Evidence from Germany and Britain," British Journal of Industrial Relations, London School of Economics, vol. 38(1), pages 7-48, March.
    13. Joel Rogers & Wolfgang Streeck, 1995. "Works Councils: Consultation, Representation, and Cooperation in Industrial Relations," NBER Books, National Bureau of Economic Research, Inc, number roge95-1.
    14. Brown, Charles & Medoff, James, 1978. "Trade Unions in the Production Process," Journal of Political Economy, University of Chicago Press, vol. 86(3), pages 355-378, June.
    15. Clark, Kim B, 1984. "Unionization and Firm Performance: The Impact on Profits, Growth, and Productivity," American Economic Review, American Economic Association, vol. 74(5), pages 893-919, December.
    16. Stephen J. Deery & Roderick D. Iverson, 2005. "Labor-Management Cooperation: Antecedents and Impact on Organizational Performance," ILR Review, Cornell University, ILR School, vol. 58(4), pages 588-609, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:spo:wpmain:info:hdl:2441/3bvs8clr5k9dqqcbq7j5ul2o65 is not listed on IDEAS
    2. Jean Barthélemy & Magali Marx, 2012. "Generalizing the Taylor Principle: New Comment," SciencePo Working papers hal-03461113, HAL.
    3. repec:hal:spmain:info:hdl:2441/3bvs8clr5k9dqqcbq7j5ul2o65 is not listed on IDEAS
    4. Jean Barthélemy & Magali Marx, 2012. "Generalizing the Taylor Principle: New Comment," SciencePo Working papers Main hal-03461113, HAL.
    5. John T. Addison & Paulino Teixeira, 2020. "Trust and Workplace Performance," British Journal of Industrial Relations, London School of Economics, vol. 58(4), pages 874-903, December.
    6. Sandra NEVOUX & Loriane PY & Laurent BAUDRY & Souny HARTWEG & Agnès MINIER & Sylvie TARRIEU, 2019. "Productive capital operating times continued to increase in 2018 - Findings of the annual Banque de France survey [La durée d’utilisation des équipements continue de progresser en 2018. Résultats d," Bulletin de la Banque de France, Banque de France, issue 222.
    7. Chouard, V. & Minier, A. & Tarrieu, S. & Baudry, L. & Soual, A., 2015. "La progression modérée de la durée d’utilisation des équipements se poursuit en 2014 - Résultats de l’enquête menée par la Banque de France," Bulletin de la Banque de France, Banque de France, issue 199, pages 43-52.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John T. Addison & Claus Schnabel & Joachim Wagner, 2004. "The Course of Research into the Economic Consequences of German Works Councils," British Journal of Industrial Relations, London School of Economics, vol. 42(2), pages 255-281, June.
    2. Uwe Jirjahn & Steffen Mueller, 2014. "Non-union worker representation, foreign owners, and the performance of establishments," Oxford Economic Papers, Oxford University Press, vol. 66(1), pages 140-163, January.
    3. John T. Addison, 2016. "Collective bargaining systems and macroeconomic and microeconomic flexibility: the quest for appropriate institutional forms in advanced economies," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-53, December.
    4. Laroche, Patrice, 2020. "Unions, Collective Bargaining and Firm Performance," GLO Discussion Paper Series 728, Global Labor Organization (GLO).
    5. John T. Addison, 2005. "The Determinants Of Firm Performance: Unions, Works Councils, And Employee Involvement/High‐Performance Work Practices," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(3), pages 406-450, July.
    6. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).
    7. John T. Addison, 2016. "Collective bargaining systems and macroeconomic and microeconomic flexibility: the quest for appropriate institutional forms in advanced economies," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-53, December.
    8. Uwe JIRJAHN & Stephen C. SMITH, 2018. "Nonunion Employee Representation: Theory And The German Experience With Mandated Works Councils," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(1), pages 201-233, March.
    9. Addison, John T. & Teixeira, Paulino, 2019. "Strikes, employee workplace representation, unionism, and industrial relations quality in European establishments," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 109-133.
    10. Beckmann, Michael & Kräkel, Matthias, 2012. "Internal rent seeking, works councils, and optimal establishment size," European Economic Review, Elsevier, vol. 56(4), pages 711-726.
    11. David Metcalf, 2002. "Unions and Productivity, Financial Performance and Investment: International Evidence," CEP Discussion Papers dp0539, Centre for Economic Performance, LSE.
    12. Christian Grund & Andreas Schmitt, 2013. "Works councils, wages and job satisfaction," Applied Economics, Taylor & Francis Journals, vol. 45(3), pages 299-310, January.
    13. John T. Addison & Clive R. Belfield, 2004. "Union Voice," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 563-596, October.
    14. John T. Addison & Thorsten Schank & Claus Schnabel & Joachim Wagner, 2006. "Works Councils in the Production Process," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(2), pages 251-283.
    15. Metcalf, David, 2002. "Unions and productivity, financial performance and investment: international evidence," LSE Research Online Documents on Economics 20072, London School of Economics and Political Science, LSE Library.
    16. Zwick, Thomas, 2004. "Employee participation and productivity," Labour Economics, Elsevier, vol. 11(6), pages 715-740, December.
    17. Steffen Mueller & Jens Stegmaier, 2017. "The Dynamic Effects of Works Councils on Labour Productivity: First Evidence from Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 55(2), pages 372-395, June.
    18. A. van den Berg & Y.K. Grift & A. van Witteloostuijn & C. Boone & O. van der Brempt, 2013. "The effect of employee workplace representation on firm performance: A cross-country comparison within Europe," Working Papers 13-05, Utrecht School of Economics.
    19. Felix FitzRoy & Kornelius Kraft, 2005. "Co‐determination, Efficiency and Productivity," British Journal of Industrial Relations, London School of Economics, vol. 43(2), pages 233-247, June.
    20. Olaf Hübler & Uwe Jirjahn, 2003. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(4), pages 471-491, September.

    More about this item

    Keywords

    labour relations; collective bargaining; trade unions; productivity;
    All these keywords.

    JEL classification:

    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:hal-01502777. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.