the scope of mandatory bargaining a critique and a proposal this paper argues that the mandatory permissive distinction in the scope of the duty to bargain collectively should be abandoned in favor of a policy of classifying all lawful subjects as mandatory the author shows that in recent applications of the distinction by the nlrb and the courts many subjects of interest to labor have been declared within the exclusive control of management she argues that the rationales used by the board and the courts in these decisions are not compelling and the mandatory permissive distinction is even less convincing when its current application is compared to the criteria of an ideal scope of bargaining

the impact on economic performance of a transformation in workplace relations this study examines how a transformation in patterns of conflict and cooperation affected economic performance in 25 work areas of a large unionized manufacturing facility in the period 1984 87 unlike most studies of industrial relations and economic performance this study clearly distinguishes conflict from cooperation but evaluates the two together rather than focusing on only one an analysis of data collected from union and employer records and interviews strongly suggests that work areas with traditional labor management relations rooted in adversarial assumptions had higher costs more scrap lower productivity and a lower return to direct labor hours worked than work areas with transformational relations characterized by increased cooperation and improved dispute resolution

the effects of human resource management practices on productivity a study of steel finishing lines the authors investigate the productivity effects of innovative employment practices using data from a sample of thirty six homogeneous steel production lines owned by seventeen companies the productivity regressions demonstrate that lines using a set of innovative work practices which include incentive pay teams flexible job assignments employment security and training achieve substantially higher levels of productivity than do lines with the more traditional approach which includes narrow job definitions strict work rules and hourly pay with close supervision their results are consistent with recent theoretical models which stress the importance of complementarities among work practices

peer pressure and partnerships partnerships and profit sharing are often claimed to motivate workers by giving them a share of the pie but in organizations of any significant size the free rider effects would seem to choke off

skill demands and mismatch in u s manufacturing recent economic events have sparked debates over the degree of structural mismatch in the u s economy one of the most frequent claims is that workers lack the skills that employers demand the existing literature however analyzes this potential mismatch at a high level of aggregation with abstract indices and noisy proxies that obscure the underlying mechanisms the authors address these issues by presenting and analyzing results from a survey of u s manufacturing establishments the survey is the first to their knowledge to directly measure concrete employer skill demands and hiring experiences in a nationally representative survey at the industry level the findings indicate that demand for higher level skills is generally modest and that three quarters of manufacturing establishments do not show signs of hiring difficulties among the remainder demands for higher level math and reading skills are significant predictors of long term vacancies but demands for computer skills and other critical

strikes scabs and tread separations labor strife and the production of defective bridgestone firestone tires this paper provides a case study of the effect of labor relations on product quality we consider whether a long contentious strike and the hiring of permanent replacement workers by bridgestone firestone in the mid 1990s contributed to the production of an excess number of defective tires using several independent data sources we find that labor strife in the decatur plant closely coincided with lower product quality count data regression models based on two data sets of tire failures by plant year and age show significantly higher failure rates for tires produced in decatur during the labor dispute than before or after the dispute or than at other plants also an analysis of internal firestone engineering tests indicates that p235 tires from decatur performed less well if they were manufactured during the labor dispute compared with those produced after the dispute or compared with those from other non striking plants monthly data suggest that the production of defective tires was particularly high around the time wage concessions were demanded by firestone in early 1994 and when large numbers of replacement workers and permanent workers worked side by side in late 1995 and early 1996

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

industrial relations performance economic performance and qwl programs an interplant analysis this study analyzes the relationship among plant level measures of industrial relations performance economic performance and quality of working life programs the analysis employs pooled time series and cross section data from 18 plants within a division of general motors for the years 1970 79 the empirical results show strong associations between industrial relations and economic performance measures and limited support for the hypothesis that quality of working life efforts improve both kinds of performance

the tradeoff between wages and employment in trade union objectives this paper demonstrates that contrary to a widely held opinion the determination of the goals of unions is fully amenable to empirical analysis a characterization of the wage and employment setting process in unionized markets is adopted and its qualitative implications examined the first order condition for this model is fitted to time series data on the newspaper industry from ten cities the international typographical union s objective function reveals very restricted opportunities for substituting wages for employment in response to a change in the slope of the employer s labor demand function larger union locals place greater emphasis on wages versus employment than smaller union locals

subjective performance measures in optimal incentive contracts objective measures of performance are seldom perfect in response incentive contracts often include important subjective components that mitigate incentive distortions caused by imperfect objective measures this paper explores the combined use of subjective and objective performance measures in respectively implicit and explicit incentive contracts naturally objective and subjective measures often are substitutes sometimes strikingly so we show that if objective measures are sufficiently close to perfect then no implicit contracts are feasible because the firm s fallback position after reneging on an implicit contract is too attractive we also show however that objective and subjective measures can reinforce each other if objective measures become more accurate then in some circumstances the optimal contract puts more weight on subjective measures because the improved objective measures increase the value of the ongoing relationship and so reduce the firm s incentive to renege we also analyze the use of subjective weights on objective performance measures and provide case study evidence consistent with our analyses

labour unrest and the quality of production evidence from the construction equipment resale market this paper examines the construction equipment resale market to assess whether equipment produced by the world s largest manufacturer of construction machinery caterpillar experienced lower product quality in facilities that underwent contract disputes during the 1990 s analysis of auction data reveals that resale market participants significantly discounted machines produced in these dispute affected facilities additionally pieces of equipment produced in facilities undergoing unrest were resold more often received worse appraisal reports and had lower list prices taken together the evidence supports the hypothesis that workmanship at dispute affected facilities declined and that the resulting impact on the economic quality of the equipment produced was significant the dispute was associated with at least 400 million in lost service flows due to inferior quality equipment alone

complementarities in organizational design and the diffusion of information technologies an empirical analysis we use a specially designed survey on french firms located in haute savoie to provide empirical evidence suggesting that information and communication technologies adoption is not only influenced by the traditional factors of technology diffusion but also by complementarity effects between strategies organization and information technologies the data collected permitted several advances firstly we could study authentic ict while the recent literature has mainly focused on computer capital stocks or automation tools secondly we constructed measures of the determinants put forward by the models of technology diffusion thirdly we studied three kinds of practices organizational and strategic practices technological choices

spatial allocation and the shadow pricing of product characteristics abstract the paper considers an industry transforming primary commodities farm products into processed commodities food products it focuses on the allocation of embedded characteristics carbohydrate protein etc both across space and among commodities the approach generates a spatial competitive market equilibrium of production consumption transformation and trade for both primary and processed commodities along with the spatial distribution of shadow prices for the product characteristics the model provides a basis for analyzing the allocation and pricing of agricultural products food products and characteristics in spatial markets the empirical usefulness of the model is illustrated in the context of regional resource allocation in the u s dairy sector

unions wages and productivity some evidence from uk engineering firms estimates of union wage and productivity effects are derived using primary micro level panel data for a sample of firms in the uk engineering industry union wage differentials of the order of 10 are suggested from the results whereas union productivity impacts appear to be non linear with respect to union density

an expressive voting theory of strikes i introduction economists usually make the realistic assumption that individuals commonly choose to further their material interests other things equal they will choose the higher paying job make the investment with a higher expected return for a given risk and so on recent work however has pointed out that individuals do not always pursue their immediate selfish interests evolutionary pressures for example may promote emotional outbursts which have little immediate benefit social pressures may lead to behavior which is not pareto optimal but which is individually rational in short recent work has shown that behavior which at first looks irrational need not be for further discussion see akerlof 1984 chs 4 and 9 etzioni 1988 frank 1988 simon 1990 this paper considers emotional behavior which cannot be explained by its long term benefits it instead focuses on behavior which is not costly when practiced by one person but is when practiced by many unlike other works i do not require that individuals usually act emotionally or that they do so at significant cost to themselves i only require that when the cost of emotional behavior is sufficiently small individuals will pursue it indeed in my model individuals rationally calculate when to behave emotionally in particular under some circumstances the action of any one individual has negligible effects on his wealth though the similar actions of numerous persons will have significant effects individuals may then free ride letting emotional motives guide their activity this paper presents one important application of such behavior the decision of a union member to vote for a strike indeed it has long been recognized that though union members may vote for strikes to increase wages emotional considerations can also be important in 1921 hansen claimed that strike decisions are motivated primarily by a sense of grievance about wages ashenfelter and johnson 1969 37 write that union leaders may prefer to call a strike because under strike conditions the leadership may at least appear as adversaries against management in a crusade which may even raise their political stock and will unify the workers newspapers tell of strikes that appear to have little economic rationale for example the wall street journal march 17 1989 reported that with the eastern airlines walkout now nearly two weeks old what boils to the surface is an intense highly personal anger a feeling that their self respect honor and dignity have been undercut by a management obsessed with pinching pennies the new york times april 23 1989 reported that four years after the end of a strike against united airlines union pilots were harassing non union pilots the harassment ranged from verbal abuse and refusal to shake hands to more serious breaches like not advising a pilot that he is approaching an altitude assigned by air traffic controllers work by getman goldberg and herman 1976 suggests that a worker in union representation elections is more likely to favor unionization the more effectively the company threatened the loss of jobs following unionization this view of non instrumental union behavior is also consistent with a large body of evidence which finds that union members are less likely to ratify a contract the worse the relations between management and labor indeed cappelli and sterling 1988 find that the state of labor relations in a plant is the strongest predictor of union voting outcomes similarly kaufman and martinez vazquez 1988 find that union members are least likely to vote in favor of wage concessions in plants with adversarial labor relations though much evidence is consistent with the hypothesis that strike votes are not based solely on economic considerations the approach suffers from two faults as a basis for an economic theory first intuition suggests that the emotional gain from a strike is likely to be far smaller than the monetary cost of a strike a strike may cost a worker over 1 000 a week in lost wages 1 yet we rarely find people wasting that much money in emotional outbursts

the role of consumers in competition and competition policy abstract this paper develops the idea that consumers behaviour matters significantly from the viewpoint of industry performance this is examined through some theoretical propositions on search and switching behaviour but then at greater length through some case study examples these demonstrate how even in potentially competitive industries reluctance by consumers to search or to switch suppliers can lead to sub competitive outcomes comparisons are made between industries where search and switching is easy and those where it is not the significance of non traditional competition policy remedies such as enforcement of annual contracts in changing the outcome is drawn out

economies of scale and economies of scope in multiproduct financial institutions a study of british columbia credit unions this paper investigates the production technology facing computerized credit unions in canada a full system of translog cost equations is estimated in order to test for economies of scale economies of scope and other production characteristics in a multiproduct context the regression results indicate that most of the credit unions in our sample experience significant increasing returns to scale as they expand their level of output there is also evidence of cost complementarity or economies of scope in their mortgage and other lending activities as a result legislation which limits the ability of credit unions to grow and diversify will likely raise the operating costs of this important group of financial institutions additional structural tests of the most general translog specification suggest that none of the restrictive production conditions commonly imposed by other researchers using cobb douglas and ces specifications provide a valid representation of credit union technology the results of many earlier studies are therefore open to question this paper presents a number of structural tests of the production technology facing large computerized credit unions in canada a full system of translog cost equations is estimated using detailed cross sectional data on british columbia credit unions the parameter estimates obtained from our multiproduct specification allow us to test for economies of scale economies of scope and factor substitution unlike many earlier studies the present paper introduces the various outputs as separate variables instead of crudely proxying them with a single output measure such as total assets the total number of loans or the number of depositors by explicitly recognizing the multiproduct nature of the intermediation process we are able to address more interesting production questions and remove some of the bias caused by misspecification and measurement error in simpler approaches the flexible translog specification allows us to estimate the sensitivity of costs to proportionate increases in all outputs economies of scale as well as the cost savings firms realize by producing several outputs jointly rather than specializing in the production of one economies of scope the test results reported in the latter part of the paper suggest that increasing returns to scale exist in almost all of the credit unions in our sample though

how much does absenteeism cost this paper presents evidence on the output loss resulting from absenteeism hedonic wage equations are estimated over two different data sets the 1972 1973 quality of employment survey and the pooled may 1973 1975 current population survey to calculate the cost in terms of reduced output and increased labor costs per payroll hour also a manufacturing production function is estimated to directly compute the productivity loss the results indicate that the effect of absenteeism on output is quite small a 10 percentage point increase in the absence rate is associated with at most a 2 1 percent decrease in the wage

how unions affect productivity in manufacturing plants this study investigates several hypotheses as to how unions may affect productivity analysis of data from 46 manufacturing plants for 1982 indicates a negative union impact on productivity the author finds evidence suggesting that unions reduce the effectiveness of some managerial practices undertaken to increase productivity and that a poor labor management relations climate also reduces productivity these two factors account for almost 50 percent of the negative union impact

plant level concession bargaining the author investigates the reasons for the diversity in concession bargaining experience among plants in the meatpacking and tire industries in 1981 negotiations about one third of the plants in each industry engaged in concession bargaining and the others did not the author hypothesizes that this pattern resulted from interplant differences in the likelihood of layoffs or shutdowns measured by factors such as plant age and size relative wage level and nature of product regression analysis of the data from union and employer sources supports the author s hypothesis

the suite smell of success personnel practices and firm performance the authors use a panel of more than 1 500 new zealand firms from a diverse range of industries to examine how the adoption of human resource management hrm practices affects firm performance the panel is based on managerial responses to mandatory surveys of management practices in 2001 and 2005 administered by the national statistical office linked to objective longitudinal firm performance data the authors find that after controlling for time invariant firm characteristics and changes in a wide range of business practices and firm developments a suite of general hrm practices has a positive impact on firm labor and multifactor productivity conversely these practices tend to have no effect on profitability in part because the adoption of performance pay systems raises average wages in the firm

union bargaining decisions and contract ratifications the 1982 and 1984 auto agreements the authors of this study investigate the determinants of union contract ratification votes by analyzing plant level data relevant to the 1982 and 1984 auto industry agreements with the uaw the results strongly suggest that the more vulnerable workers are to layoff the more likely they are to vote for ratification of proposed agreements the results also show however that workers tend to vote against ratification in plants in which other things equal the labor relations climate is poor in addition comparisons across contracts indicate how voting patterns associated with various plant and worker characteristics change when contract proposals shift toward greater job security and away from wage increases

concession bargaining the impact on shareholders equity this analysis of bargaining settlements in 1982 83 shows that on average shareholders in those firms that negotiated concessionary settlements enjoyed an 8 to 10 percent increase in the value of their holdings the author interprets this result to mean not that the value of the firm increased but rather that concessions enlarged the shareholders portion of the firm s value at the expense of the workers portion on the other hand concession bargaining does not seem to have reallocated business risk between shareholders and labor finally the evidence suggests that firm specific sources of risk can explain in part not only the magnitude of the concession effects but also the probability that concession bargaining will occur

toward a structural account of union participation in management the case of western airlines in 1983 and 1984 four unions at western airlines agreed to wage cuts work rule changes two tier wage plans and other concessions in return for seats on the board of directors a health services program financial information sharing and an employee involvement program the author uses data from interviews conducted with all parties between 1983 and 1987 to argue that meaningful and lasting employee participation occurred only when the union had enough power to induce management to forgo some of its traditional prerogatives a structural factor the union and management shared a vision of how participation could serve both parties interests a cognitive factor and the union had substantial institutional security a second structural factor

evaluating the econometric evaluations of training programs with experimental data this paper takes the results of an employment and training program thatwas run as a field experiment in which the participants were randomlyassigned into a treatment or a control group and compares these results to the estimates that might have been produced by an econometrician who evaluated the program using the same econometric procedures that have been used in the program evaluation literature this comparison shows that many of these econometric procedures fail toreplicate the experimentally determined results and suggests that researchers should be aware of the potential for specification errorsin other nonexperimental evaluations copyright 1986 by american economic association

information sharing and lending market competition with switching costs and poaching abstract we analyze information sharing with repeated banking competition in the presence of switching costs we find that information sharing renders poaching more profitable in future rounds of competition since the poaching activities can be targeted towards more creditworthy borrowers we find that information sharing reduces relationship benefits and therefore relaxes competition for initial market shares information sharing introduces a welfare tradeoff by promoting equilibrium profits at the expense of talented entrepreneurs whenever market power persists in credit market whereas it is a matter of indifference without market power thus information sharing may induce exclusion of creditworthy borrowers from credit markets

the effects of reform on china s bank structure and performance abstract this paper investigates the relationship between market structure and performance in china s banking system from 1985 to 2002 a period when this sector was subject to gradual but notable reform using panel data estimation techniques both the market power and efficient structure hypotheses are tested in addition the model is extended to consider issues such as the impact of bank size ownership and whether the big four banks enjoy a quiet life on average x efficiency declined significantly and most banks were operating below scale efficient levels estimation of the structure performance models lends some support to the relative market power hypothesis in the early period the reforms had little impact on the structure of china s banking sector though the joint stock banks became relatively more x efficient there was no evidence to support the quiet life hypothesis probably because strict interest rate controls prevented the state banks from earning monopoly profits thus the ongoing liberalisation of interest rates should be accompanied by reduced concentration overall to improve competitive structure new policies should be directed at encouraging market entry and increasing the market share of the most efficient banks

carrots and sticks pay supervision and turnover the efficiency wage model ewm has been advanced as an explanation for large and persistent wage differentials the shirking version of the ewm assumes a trade off between self supervision and external supervision the turnover version assumes turnover is costly to the firm variation across firms in the cost of monitoring shirking or turnover then is hypothesized to account for wage variations across firms for homogeneous workers using a new sample of firm data this paper presents empirical evidence of the trade off of wage premiums for supervisory intensity and turnover little evidence is found to support either version of the ewm

the impact of union management cooperation on productivity and employment this study examines the effects of union management cooperative programs on productivity and employment the author collected productivity and employment data for each of nine manufacturing plants at monthly time intervals over a period of four to five years from two years before to at least two years after the introduction of the cooperative program regression analysis of these time series data is supplemented by qualitative data from personal interviews and relevant records the results show that after introduction of the cooperative programs productivity increased in six of the eight firms in which it could be measured and employment remained stable in eight of the nine firms

the determinants and profitability of switching costs in chinese banking this article models the determinants of bank switching costs in china in terms of bank characteristics and non bank variables it also determines the contribution of switching costs to banks profits using a sample of 151 banks over the period 2003 2013 it reports a positive relationship between bank profitability and switching costs the main result is that bank size measured by total assets has a complex relationship with switching costs competition between small banks creates the incentive for lock in and increased switching costs whereas very large banks are less exercised by lock in and switching costs

employee voice human resource practices and quit rates evidence from the telecommunications industry the authors draw on strategic human resource and industrial relations theories to identify the sets of employee voice mechanisms and human resource practices that are likely to predict firm level quit rates then empirically evaluate the predictive power of these variables using data from a 1998 establishmentlevel survey in the telecommunications industry with respect to alternative voice mechanisms they find that union representation predicts lower quit rates even after they control for compensation and a wide range of other human resource practices that may be affected by collective bargaining also predicting lower quit rates is employee participation in offline problem solving groups and in self directed teams no apparent association is found between quit rates and the availability of nonunion dispute resolution procedures regarding human resource practices higher relative wages and internal promotion policies predict lower quit rates and contingent staffing electronic monitoring and variable pay predict higher rates

estimating product specific and multiproduct economies of scale with data envelopment analysis nonparametric cost frontier estimation and subsequent analysis of the relative efficiency of firms has historically been conducted without critically examining the shape of the cost frontier the shape of the cost frontier has been examined using additional parametric estimation methods to recover potential cost savings from multiproduct and product specific economies of scale this paper presents and tests an approach to estimate multiproduct and product specific economies of scale using data envelopment analysis data for the study are simulated assuming an underlying production technology nonparametric estimates of efficiency multiproduct scale product specific scale and scope economies are compared to those of the assumed production technology results show that the nonparametric approach accurately estimates multiproduct economies of scale and product specific economies of scale under alternative inefficiency distributional assumptions

unions and cooperative behavior the effect of discounting using union contract and industry wage survey data this article examines the effect of discounting on cooperative bargaining behavior by unions and firms game theory predicts that higher discount rates raise the temptation to defect from cooperation measures of cooperative behavior included the presence of merit pay incentive pay wage employment guarantees or labor management study committees discount rates were proxied by the relevant industry s failure rate failure rates generally had negative effects on cooperation industry wage survey results showed larger effects for union than non union establishments providing support for the union bargaining framework

banking structure and industrial growth evidence from china abstract the debate on the puzzling relationship between financial development and economic growth in china has remained inconclusive because the effects of banking ownership structure and size structure are highly intertwined in the existing studies this paper addresses this problem by specifying an empirical model to disentangle the two structural effects the analysis uses a data set that includes the banking sector and 28 manufacturing industries across 30 chinese provinces over the period 1999 2007 in order to identify the channel through which banking structure affects industrial growth two interactive variables are constructed to capture the interaction of the prevailing banking structure with labor intensity and the share of non state owned enterprises in each industry respectively the regression results are robust and make the case for the ongoing banking reforms to reduce state ownership and promote small banking institutions

a test of an efficiency model of grievance activity copyright by cornell university this is the publisher s version also available electronically from http ilr sagepub com content 45 1 3 refs

measuring economies of scale and scope in agricultural banking generally empirical studies have used either duality theory with the estimation of cost functions or nonparametric estimation methods to assess efficiency in the financial services industry the purpose of the present study is to estimate economies of scope and scale in agricultural banking this will be accomplished through estimation of an indirect multi product cost function the uniqueness of this study when compared to previous studies of efficiency of the financial services industry is the disaggregation of the outputs so that agricultural lending can be evaluated in addition a normalized quadratic cost function is estimated with curvature properties imposed clark reviewed thirteen studies that measured economies of scope and scale for commercial banks credit unions and savings and loan associations he found that they offered four broad conclusions a overall economies of scale exist at low levels of input b no consistent evid nce of economies of scope exists c some evidence of cost complementarities exists and d the results seem to be robust among financial institutions

union leaders as experts wage bargaining and strikes with union wide ballot requirements to avoid strikes and to curb labour militancy some governments have introduced legislation stating that union leadership as well as wage offers should be decided through union wide ballots this paper shows that members still have incentives to appoint militant union leaders if these leaders have access to information critical for the members voting decisions furthermore conflicts may arise in equilibrium even though the contract zone is never empty and there is an option to resolve any incomplete information ballot requirements hence preclude neither militant union bosses nor inefficient conflicts

union wage practices and wage dispersion within establishments this study analyzes establishment level data primarily to examine the effect of unionism on the wage structure within establishments the major finding is that within establishment dispersion of wages is significantly narrower in unionized than in nonunionized establishments a pattern the author attributes in large part to unions wage practices such as single rate or automatic progression modes of wage payment as opposed to merit reviews and individual wage determination the data also show that dispersion in average wages is narrower among organized plants but by more modest amounts than the within establishment differential overall the evidence suggests a major role for explicit union wage policies in explaining the dispersion of wages within firms and in the economy as a whole

unionism and productivity in west virginia coal mining this study presents econometric estimates of the effects of unionism on productivity in 83 west virginia coal mines in the early 1920s the size detail and panel structure of the data set permit investigation of many possible links between unionism and productivity in contrast to the summary measures reported by most studies the results show that the union effect was not uniform across mines and cannot be represented by a simple shift parameter rather unionism significantly reduced productivity at small mines but not at large mines drawing on historical evidence the author ascribes this differential effect to systematic differences between small and large operations in the quality of management and union leadership

switching costs and relationship profits in bank lending abstract this paper studies how the cost of switching banks affects the profits available from relationship based lending when the relationship produces inside information lower switching cost compounds the adverse selection problem discouraging outsider banks to depress loan rates the adverse selection effect eases off along with higher switching cost leading to more aggressive bidding and thereby reduction in insider profits above a certain threshold however the adverse selection effect vanishes completely and the insider profits turn increasing in the switching cost the model predicts that the availability of relationship credit is non monotonously related to the magnitude of the switching cost

australian evidence on the exit voice model of the labor market two predictions of the exit voice model of union activity that have been confirmed by empirical research in the united states are that union workers will have longer tenures and lower quit rates th

the effects of grievance activity on productivity this study develops and tests a production function that includes a plant s grievance filing rate as a determinant of productivity application of that function to data on nine unionized paper mill

economies of scale and economies of scope in multiproduct financial institutions further evidence from credit unions recently murray and white 1983 have analyzed economies of scale economies of production due to output expansion and economies of scope economies due to joint production of output for credit unions of british columbia by explicitly recognizing the multiproduct nature of the credit union unfortunately their analysis of scale and scope economies is limited in view of recent advances in the theory of the multiproduct firm for example in multiproduct firms there exist two economies of scale economies arising from overall production activity and economies arising from the production of a particular product or a product set estimates of scale economies obtained by murray and white hereafter mw are overall scale economies but no discussion of product specific scale economies is provided in their analysis further mw employ the cost complementarity concept as a measure of economies of scope however cost complementarity is a local not global test for the existence of economies of scope in addition it is necessary to distinguish overall scope economies from product specific scope economies this paper reexamines the issue of economies of scale and scope in credit unions extending the model developed by mw and providing some new empirical evidence section 1 extends the model developed by mw to reexamine the issue of scale and scope in multiproduct credit unions section 2 contains a description of empirical results section 3 completes the paper with a conclusion

estimating multiproduct and product specific scale economies for agricultural cooperatives this article estimates multiproduct and product specific scale economies scope economies and cost efficiency with single and annual cost frontiers using a nonparametric approach multiproduct scale and scope economies are found that suggests increasing scale and product diversification can reduce cost for agricultural cooperatives many agricultural cooperatives experience economies of scale indicating that variable returns to scale as opposed to constant returns to scale is the appropriate technology for modeling agricultural cooperatives product specific scale economies for all outputs are close to one indicating that individual outputs are operating close to constant returns to scale annual frontier estimates show that cooperatives have become less cost efficient over time but scale and scope economies remain relatively consistent across years further results show that economic measures obtained from the single frontier are statistically different from those measures calculated from annual frontiers suggesting that the cost frontier has shifted over time the trade off between cost efficiency and multiproduct scale economies indicates that smaller cooperatives can reduce a higher percentage of cost by increasing the scale of operations rather than just becoming cost efficient because larger incentives exist for small cooperatives to increase scale mergers will likely continue until economies of scale are exhausted in the industry

switching cost and deposit demand in china this article develops and estimates a dynamic model of consumer demand for deposits in which banks provide differentiated products and product characteristics that evolve over time the switching cost is 0 8 of the deposit s value which leads the static model to bias the demand estimates the dynamic model shows that the price elasticity over a long time horizon is larger than the same elasticity over a short time horizon counterfactual experiments with a dynamic monopoly show that reducing the switching cost has a comparable competitive effect on bank pricing as a result of reducing the dominant position of the monopoly

a quick and easy method for estimating switching costs abstract i develop and test a method for a quick and easy calculation of consumer switching costs among brands in a given industry the theory developed and tested here maps observed brands prices and market shares onto the switching costs which deter a consumer of a specific brand from switching to any other competing brand then i demonstrate how users switching costs can be directly calculated in two different industries a the israeli cellular phone market and b the finnish market for bank deposits this calculation method can be used to calculate switching costs in a wide variety of other industries such as airlines health services computers software telecommunications and more

the effect of unions on productivity in a multinational manufacturing firm this paper examines the effect of unions on productivity in 31 plants of a large multinational firm in the years 1975 82 the plants 60 percent of which are unionized all produce a similar line of products using material intensive labor intensive low technology methods results obtained by estimating a translog production function indicate that unionization s overall effect on productivity is positive specific findings are that unionization increases the capital labor ratio and improves management performance but it also raises the absenteeism rate a net positive effect on productivity remains even when these channels of union influence are controlled for a result that the author suggests may reflect an improved labor relations climate or improved labor quality associated with unionization

multiproduct cost relationships for retail fertilizer plants volume cost relationships developed from the statistical analysis of accounting data have long provided useful information for evaluating firm efficiency french previous descriptive and statistical analyses of accounting data as well as economic engineering cost studies of retail fertilizer firms have focused on a single product line anderson and miller raikes and heubrock williams foster and simpson service o rourke or have simply summarized industry accounting data akridge and downey problems associated with using accounting data to estimate statistical cost functions include a the failure to handle satisfactorily multiproduct firm cost relationships

union effects on productivity profits and growth has the long run arrived this article interprets literature examining union effects on economic performance production function studies indicate small overall union impacts on productivity positive effects where they exist appear to result from management response to decreased profit expectations and from a natural selection process lower profitability among unionized firms is well established more interesting is the possibility that unions appropriate quasi rents deriving from long lived tangible and intangible capital the connection between unions investment behavior and productivity growth emerges as a particularly fruitful line of empirical inquiry although it does not encourage a sanguine view of unionism s long run impact

the structure performance relationship for european banking abstract the relationship between market structure and performance has been studied extensively for american banking in contrast little work has been done to investigate this relationship for european banking two explanations of a positive correlation between profitability and concentration have been advanced the traditional structure performance hypothesis scp and the efficient structure hypothesis previous empirical tests of the alternative hypotheses have yielded mixed results but the tests were not robust because they did not incorporate measures of efficiency directly in the model this study applies a stochastic cost frontier as proposed by aigner et al 1977 to derive measures of x inefficiency and scale inefficiency under the assumption that the errors are distributed half normal we incorporate these measures of inefficiencies directly into the tests as proposed by berger and hannan 1993 we do not find a positive and significant relationship between concentration and profitability for a sample of banks across 11 european countries over a four year period 1988 1991 however we do find evidence to support one of the two versions of the efficient structure hypothesis for banks located in countries with low concentration of banks since little support is found for either of the scp hypotheses a simple policy of strict limitations on cross border acquisitions and growth is not warranted

cooperative pricing and scale efficiency the case of korean rice processing complexes unlike most investor owned enterprises cooperatives often have freedom to choose among a variety of firm objectives using 2002 2008 plantand province level data we ask in the present article which of several alternative maximands a korean cooperative rice processing firm pursues in contrast to earlier studies farmer member supply functions are incorporated into the cooperative s optimization framework we show that only large cooperative firms have operated at efficient scale while small and medium sized ones have been scale inefficient because the latter operate where scale returns are increasing mergers of small and medium sized cooperatives likely would be cost reducing and member return enhancing

is poor worker morale costly to firms in 1985 and 1990 studies norsworthy and zabala reported evidence supporting the hypothesis that declining worker morale has reduced productivity and productivity growth this study partly replicat

predicting the outcome of a contract ratification vote this study examined the role of employee assessments of psychological and material factors in predicting the outcome of a contract ratification vote the results show that both the material aspects of the contract settlement at hand and how members feel about their union and their jobs have an important impact on the ratification outcome

growing apart the changing firm size wage premium and its inequality consequences wage inequality in the united states has risen dramatically over the past few decades prompting scholars to develop a number of theoretical accounts for the upward trend this study argues that large firms have been a prominent labor market institution that mitigates inequality by compensating their low and middle wage employees with a greater premium than their higher wage counterparts large u s firms reduced overall wage dispersion yet broader changes to employment relations associated with the demise of internal labor markets and the emergence of alternative employment arrangements have undermined large firms role as an equalizing institution using data from the current population survey and the survey of income and program participation we find that in 1989 although all private sector workers benefited from a firm size wage premium the premium was significantly higher for individuals at the lower end and middle of the wage distribution compared to those at the higher end between 1989 and

the power of labor to grieve the impact of the workplace labor market and power dependence on employee grievance filing the authors examine a model of employee grievance activity that encompasses both workplace and labor market determinants and attempts to reconcile inconsistent findings in the literature by taking