a nonparametric cost approach to scale efficiency starting with farrell fieldhouse 1962 a host of notiparametric models have been developed for calculation of scale efficiency a common property of these models is that they are specified in terms of input output data duality theory has taught us that technological characteristics may be analyzed from either the primal or the dual cost side the purpose of this paper is to introduce a nonparametric dual method of calculating scale efficiency

competition and corporate performance are people right to think that competition improves corporate performance my investigations indicate first that there are some theoretical reasons for believing this hypothesis to be correct but they are not overwhelming furthermore the existing empirical evidence on this question is weak however the results reported here based on an analysis of around 670 u k companies do provide some support for this view most important i present evidence that competition as measured by increased numbers of competitors or by lower levels of rents is associated with a significantly higher rate of total factor productivity growth

on success and dissolution of the labor managed firm in the capitalist economy labor managed firms lmfs in the developed capitalist economy exhibit an interesting life cycle pattern often they come into existence as a way of reorganizing insolvent entrepreneurial profit maximizing firms yet successful lmfs tend to be assimilated to the entrepreneurial modus operandi in the long run i propose a simple theoretical model that explains this lmf phenomenon as the outcome of the lmf s interaction with outside markets especially competitive spot labor markets the interpretations and limitations of the model are also discussed as the basic framework is extended to deal with imperfections in capital markets and with contractual labor markets

productivity and distribution effects of codetermination in an efficient bargaining model codetermination can be regarded as an extreme regulatory intervention of the legislator in the labor market which might affect the efficiency of production and the bargaining power of labor based on a model that covers both efficient bargaining and employment bargaining a simple equation is derived that is suited to empirical testing the empirical test is based on german data and includes years before and after the extension of german codetermination law in 1976 the estimates determine the productivity of labor and relative bargaining power of capital and labor it turns out that codetermination does not affect productivity but leads to a significant increase in workers bargaining power and the distribution of rents

technical and environmental efficiencies and best management practices in agriculture an input distance function idf is estimated to empirically evaluate and analyse the technical and environmental efficiencies of 210 farms located in the chaudiere watershed quebec where water quality problems are particularly acute because of the production of undesirable outputs that are jointly produced with agricultural products the true idf is approximated by a flexible translog functional form estimated using a full information maximum likelihood method technical and environmental efficiencies are disaggregated across farms and account for spatial variations our results show that there is a significant correlation between the two efficiencies the idf is used to compute the cumulative malmquist productivity index and the fisher index the two indices are used to measure changes in technology profitability efficiency and productivity in response to the adoption of two selected best management practices bmps whose objective is to reduce water pollution we found significant differences acro

labor participation in corporate policy making decisions west germany s experience with codetermination if workers are wealth maximizers codetermination should lead to less risky investments smaller dividends reduced firm leverage higher and more stable salaries and more capital intensive production processes unless codetermination also increases productivity by raising wokers morale and satisfaction or reduces information asymmetries within the firm shareholder wealth and firm value will decline an analysis of west germany s case however indicates that codetermination has little if any effect on corporate operations and performance

firm size and efficiency in the german mechanical engineering industry research usually finds a positive size efficiency relationship but few studies focus on sectors dominated by small and medium sized firms smes this paper fills this gap by analyzing this relationship in the german mechanical engineering industry sector which is both successful and increasingly dominated by smes the analysis using a large and representative dataset finds that small and large firms are on average the most efficient ones while medium sized firms have on average the greatest inefficiencies thus the size efficiency relationship is u shaped rather than monotonically increasing additionally the analysis finds that companies with active owner s are significantly more efficient and that capital firms are less efficient than firms with personally liable owners being located in either east or west germany has no effect

statistical inference for aggregates of farrell type efficiencies in this study we merge results of two recent directions in efficiency analysis research aggregation and bootstrap applied as an example to one of the most popular point estimators of individual efficiency the data envelopment analysis dea estimator a natural context of the methodology developed here is a study of efficiency of a particular economic system e g an industry as a whole or a comparison of efficiencies of distinct groups within such a system e g regulated vs non regulated firms or private vs public firms our methodology is justified by the neoclassical economic theory and is supported by carefully adapted statistical methods copyright 2007 john wiley sons ltd

internal bargaining and strategic innovation in the theory of the firm abstract the transaction cost analysis of the firm has identified asset idiosyncrasy and the risk of ex post opportunism as key determinants of organizational form simultaneously several writers have modeled the distribution of quasi rents among input suppliers as a bargaining game these complementary ideas are used to formalize the notion of strategic innovation where capital and labor attempt to redistribute firm income after specialized assets are in place through unilateral modifications in production technology because strategic behavior can enlarge the quasi rent component of fifirm income this process may persist in equilibrium asset idiosyncrasy therefore creates room for an autonomous theory of organizational dynamics partially insulated from events at the market level of analysis

productivity growth technical progress and efficiency in their comment subhash c ray and evangelia desli 1997 hereafter rd point out that the specification of the decomposition of the malmquist productivity index used by fare et al 1994 hereafter fgnz is not unique and propose and compute an alternative specification of that decomposition we will discuss additional decompositions at the end of this note but proceed here by comparing the rd decomposition with fgnz based on both conceptual and computational grounds rd provide a discussion of the overall malmquist productivity index including the important issue of when this index is equivalent to the traditional notion of total factor productivity tfp namely under the condition that the reference technology be consistent with constant returns to scale crs as they point out this will yield a measure of tfp even if the true underlying technology is not crs for example both rd and fgnz use the crs reference technology to compute overall malmquist productivity one of the key issues raised is the role of the underlying scale properties of the benchmark technologies used to define and compute both productivity and its components in particular two reference technologies are employed in both rd and fgnz what we refer to as crs and variable returns to scale vrs technologies by construction these technologies are nested the crs technology contains the vrs technology as in figure 1 in rd this nestedness provides the logical basis for our decomposition at a very intuitive level we would argue that these two benchmarks can be used to provide bounds on the underlying true but unknown technology 2 intuitively we see the vrs technology providing a type of convex inner approximation whereas the crs technology provides a type of convex outer approximation thus these two technologies provide alternative benchmarks they do not require that the data satisfy either crs or vrs another possible intuitive interpretation is that the crs captures a perhaps hypothetical long run and the vrs approximates the short run as a reference technology the crs technology has some very useful features for example it captures the notion of maximal

analysis of environmental efficiency variation in this article we develop and implement a methodology for analyzing the sources of variation in environmental efficiency across producers we formulate a two stage model in the first stage we use stochastic frontier analysis to estimate both technical and environmental efficiency in the second stage we again use stochastic frontier analysis to regress estimated environmental efficiency scores against a variety of technology physical environment and management variables in this stage we estimate the impact of each explanatory variable on environmental efficiency and we derive conditional estimates of environmental efficiency from the one sided error component we illustrate our methodology with an empirical application to a panel of dutch dairy farms we find evidence of relatively low levels of environmental efficiency and we find that environmental efficiency can be improved through a number of policy options including the provision of farmers with more insight into the nutrient balance of their farms

monitoring physicians a bargaining model of medical group practice this paper challenges the proposition that large physician owned groups will be inefficient because of failures to control opportunism a bargaining model implies that even large partnerships will make efficient resource and monitoring decisions in addition opportunism has much the same payoff for employees and partners the data show that most large medical practice organizations are physician owned empirical analyses of nine forms of monitoring by large groups generally show no clear link between monitoring and ownership there is one exception physician owned firms tend to base compensation on productivity which may help explain the continued dominance of professional partnerships

on the economic rationale for codetermination law abstract this paper develops a positive efficiency economic case for codetermination law resting on the correction of labor and capital market and organizational failures a legally mandated codetermination structure is shown to provide employee checks on several structural incentives for management opportunism codetermination is shown to offer advantages for technical efficiency skill development and knowledge generation through its protection of specific human capital investments financial markets cannot enforce codetermination due to a set of free rider problems

entry and managerial incentives abstract this paper presents a two period full information model of entry where owners of incumbent and entrant firms endogenously select the incentive schemes for their managers it is shown that when output decisions are delegated to managers the incumbent s owner chooses to base incentive schemes only partly on profit but if output decisions are reached via nash bargaining between managers the incumbent s owner will base the reward on profit alone the entrant never bases the incentive scheme solely on profit if there is a sufficiently high fixed cost of entry then the incumbent can deter entry by providing management with appropriate incentive schemes

wage pressure bargaining and price cost margins in uk manufacturing to the extent that union employer bargaining is efficient price cost margins in oligopolistic industries are predicted to depend on wage rents and on the elasticity of substitution between wages and employment in union preferences unanticipated wage inflation will also affect margins cross section and time series analysis of price cost margins in u k manufacturing industries finds that margins tend to be eroded by the level of wage rents and are invariant to the rate of wage inflation copyright 1990 by blackwell publishing ltd

the determinants of efficiency the case of the spanish industry the aim of this paper is to analyse the factors explaining the technical efficiency of spanish industrial sectors during the period 1991 1994 using the survey of business strategies sbe of the ministry of industry and energy it analyses whether efficiency can be explained by factors external to the firm such as the degree of competition in the markets in which it operates characteristics of the firm size organization advantages of location participation of public capital etc as well as the effects of dynamic disturbances that may affect the degree of utilization of the productive capacity

does privatization improve job satisfaction the case of ghana this paper analyzes the impacts of privatization in ghana on the basis of a survey of 300 workers in privatized and state owned enterprises the findings indicate a significant positive relationship between privatization and job satisfaction whereas monthly wage is an important determinant of job satisfaction in state owned enterprises education and the availability of training opportunities are strong determinants in privatized enterprises the study also shows that there exists a variety of instruments to implement a privatization program smoothly

provision of environmental output within a multi output distance function approach this paper redefines technical efficiency by incorporating provision of environmental goods as one of the outputs of the farm the proportion of permanent and rough grassland to total agricultural land area is used as a proxy for the provision of environmental goods stochastic frontier analysis was conducted using a bayesian procedure the methodology is applied to panel data on 215 dairy farms in england and wales results show that farm efficiency rankings change when provision of environmental outputs by farms is incorporated in the efficiency analysis which may have important political implications

employee participation in management bargaining power and wages the paper analyzes the impact of employee participation in management on bargaining power and wages it presents an empirical model which allows for variable bargaining powers of the parties who jointly control the firm and it tests this model with postwar west german data the results suggest that parity codetermination has had a positive effect on earnings in iron and steel but not in coal mining moreover it appears that the positive effect in iron and steel could be due to increased profitability rather than an increase in the bargaining power of labor as defined in this study

estimating most productive scale size using data envelopment analysis abstract the relation between the most productive scale size mpss for paparticular input and output mixes and returns to scale for multiple inputs multiple outputs situations is explicitly developed this relation is then employed to extend the applications of data envelopment analysis dea introduced by charnes cooper and rhodes ccr to the estimation of most productive scale sizes for convex production possibility sets it is then shown that in addition to productive inefficiencies at the actual scale size the ccr efficiency measure also reflects any inefficiencies due to divergence from the most productive scale size two illustrations of the practical applications of these results to the estimation of most productive scale sizes and returns to scale for hospitals and stem electric generation plants are also provided emphasize the advantage of this method in examining specific segments of the efficient production surface

employment determination in enterprises under communism and in transition evidence from central europe the authors present a comparative analysis of employment determination in four transition economies as they moved from central planning to a market economy in the early 1990s they use firm level panel data sets from the czech republic hungary poland and slovakia to estimate dynamic employment equations for the period from immediately before to immediately after the start of transition for the most part firms appear to have been quick to adjust employment to wage levels and there is little evidence of labor hoarding there were important cross country variations in the determinants of employment during the reform process however hungarian and polish firms started the transition already substantially reformed and became even more responsive to market signals as transition proceeded in contrast firms in the czech and slovak republics started in the completely unresponsive mode characteristic of central planning but rapidly caught up with their counterparts in hungary and poland

unemployment collective bargaining and the demand for protection there is a widespread consensus among nonacademic observers that labor unions with large numbers of unemployed members have been central actors in political coalitions demanding protectionist trade policies since the mid 1970s in advanced industrial societies yet trade unions and unemployment are hardly mentioned in most theories of the politics of international trade the purpose of this paper is to develop a theoretical framework for understanding the importance of unemployment as a determinant of protectionist demands that is consistent with optimizing behavior on the part of union members and firms models of labor negotiations derived from cooperative bargaining theory are used to illustrate why the material benefits of protection received by union members and their employers in protected industries increase when union members are unemployed even when workers are risk neutral and capital is immobile

do land markets improve land use efficiency evidence from jiangsu china inefficient use of scarce and fragmented land challenges the sustainability of agriculture land markets may improve land use efficiency in recent years china has employed various instruments to

behavior of participatory firms in yugoslavia lessons for transforming economies this paper develops a multiparty model of enterprise behavior with the management workers and government authorities being the decisionmakers the model captures the behavior of yugoslav enterprises in the 1970s and 1980s enterprises in transitional economies and public sector bargaining in western countries estimating the model on yugoslav firm level data from the 1970s and 1980s indicates that the perverse behavior predicted by the ward domar vanek model of labor managed firms is not supported by the data as firms place emphasis on both wages and employment a direct test shows that the employment response to output price changes is insignificant coauthors are jan svejnar dubravko mihaljek and vesna prasnikar copyright 1994 by mit press

strategic investment and the co existence of labour managed and profit maximising firms the authors examine firm profitability in mixed duopoly equilibrium with one labor managed lm firm and one profit maximizing pm firm and with strategic investment conventional wisdom suggests that firms deviating from profit maximization will suffer forced exit in the long run the authors reverse this conclusion in mixed lm pm duopoly with strategic investment no equilibrium can have both firms making zero profits and pm profitability implies lm profitability but not the converse adverse parameter shifts would cause the pm firm to exit first empirical evidence is consistent with this prediction of robust market survivability of lm firms

market imperfections labor management and earnings differentials in a developing country theory and evidence from yugoslavia in this paper we evaluate empirically the relative importance of two explanations of yugoslav interindustry income differentials one explanation proposed initially by vanek and jovicic 1975 stresses capital market imperfections which permit capital rents to be appropriated as workers incomes the second explanation points to labor allocation problems under self management we first present a critique of the vanek jovicic original formulation and then respecify the problem to permit simultaneous evaluation of the two schools of thought results based on two data sets suggest that labor allocation factors and monopoly power rather than capital rents are the main source of yugoslav earnings dispersion

internal bargaining labor contracts and a marshallian theory of the firm the theme of this paper is due to alfred marshall who states that nearly the whole income of a business may be regarded as a composite quasi rent divisible among different persons in the business by bargaining supplemented by custom and by notion of fairness and the division of quasi rents entails de facto some sort of profit loss sharing between almost every business and its employees principles of economics 8th ed book vi ch viii sec 10 pp 520 21 marshall emphasizes that a significant portion of composite quasi rent is derived from the organization of business and would be lost if employer employee connections were dissolved in this view bargaining can even be tacit insofar as there is an organizational basis which ensures agreement among the concerned parties consequently internal bargaining models of the firm may be applicable to the analysis of european style codetermination and japanese style labor management also as the relative bargaining strength between labor and management changes such a view of the firm admits as its extrema the organization of a labor managed firm lmf and the textbook case of a profit maximizing firm pmf masahiko aoki 1980 1982 and jan svejnar 1982 have recently explored models of an internal bargaining firm their analyses however consider the firm s long run behavior only under restricted circumstances without market uncertainty the relevance of the internal bargaining approach to profit sharing and labor management would be enhanced if we integrated the firm s short run wage employment policies with its long run plans for the rate of growth and capital labor substitutions this i do by underscoring the firm s organizational basis which is essentially a long term contractual association between workers and management i combine costas azariadis 1975 and martin baily s 1974 apparatus of labor contracting with efficient bargaining to investigate the effect of varying degrees of labor s bargaining power upon the firm s shortand long run policies under uncertainty these results are then contrasted with the empirical findings of collective bargaining for example richard freeman and james medoff 1981 conventional results of lmf models jaroslav vanek 1970 benjamin ward 1958 and the recent macroeconomic approaches to wage employment adjustments ian mcdonald and robert solow 1981

econometric estimation of technical and environmental efficiency an application to dutch dairy farms in this article we estimate the technical and environmental efficiency of a panel of dutch dairy farms nitrogen surplus arising from the application of excessive amounts of manure and chemical fertilizer is treated as an environmentally detrimental input a stochastic translog production frontier is specified to estimate the output oriented technical efficiency environmental efficiency is estimated as the input oriented technical efficiency of a single input the nitrogen surplus of each farm the mean output oriented technical efficiency is rather high 0 894 but the mean input oriented environmental efficiency is only 0 441 intensive dairy farms are both technically and environmentally more efficient than extensive farms

models of modern sector labor market institutions in developing countries abstract the paper argues that policy conclusions derived from existing theories of economic development may be seriously flawed because the theories do not model correctly the modern sector labor market the paper first presents evidence that trade unions and governments frequently exert positive influence not only on firms wages but also on their employment levels it then presents models that capture this phenomenon and permit one to determine whether the observed levels of employment are insufficient optimal or excessive from the private and social standpoints the paper concludes with a discussion of how the analysis could be implemented in empirical studies and in practical policy work

analysis of environmental efficiency variations a nutrient balance approach recent literature has argued that environmental efficiency ee which is built on the materials balance mb principle is more suitable than other ee measures in situations where the law of mass conversation regulates production processes in addition the mb based ee method is particularly useful in analysing possible trade offs between cost and environmental performance identifying determinants of mb based ee can provide useful information to decision makers but there are very few empirical investigations into this issue this article proposes the use of data envelopment analysis and stochastic frontier analysis techniques to analyse variation in mb based ee specifically the article develops a stochastic nutrient frontier and nutrient inefficiency model to analyse determinants of mb based ee the empirical study applies both techniques to investigate mb based ee of 96 rice farms in south korea the size of land fertiliser consumption intensity cost allocative efficiency and the share of owned land out of total land are found to be correlated with mb based ee the results confirm the presence of a trade off between mb based ee and cost allocative efficiency and this finding favouring policy interventions to help farms simultaneously achieve cost efficiency and mp based ee

developing a social perspective to farm performance analysis abstract this paper examines how traditional farm productivity analysis can be extended to produce a performance measure from the perspective of society a biophysical model is used to measure inputs from the environment which are combined with conventional marketed inputs to develop an environmentally sensitive malmquist productivity index to determine social productivity growth data envelopment analysis dea is used to analyze data collected from selected farms in south east australia and includes a measure of leaching and run off as a proxy measure of the impact the application of fertilizers has on ground and surface water the results show measured productivity growth increases for some farms and decreases for others when environmental factors are considered

priorities and sequencing in privatization evidence from czech firm panel data abstract while privatization of state owned enterprises has been one of the most important aspects of the economic transition from a centrally planned to a market system no transition economy has privatized all its firms simultaneously this raises the question of whether governments privatize firms strategically in this paper we examine the determinants of the sequencing of privatization to obtain testable predictions about the factors that may affect sequencing we investigate the following competing government objectives i maximizing efficiency through resource allocation ii maximizing public goodwill from the free transfers of shares to the public iii minimizing political costs iv maximizing efficiency through information gains and v maximizing privatization revenues next we use firm level data from the czech republic to test the competing predictions about the sequencing of privatization consistent with the hypotheses of a government priority on revenues and public goodwill we find strong evidence that more profitable firms were privatized first the sequencing of privatization is also consistent with maximizing efficiency through information gains our results indicate that many empirical studies of the effects of privatization on firm performance suffer from a selection bias

measuring and explaining scale efficiency with the parametric approach the case of greek tobacco growers estimates of technical and scale inefficiencies of tobacco farms in greece during the period 1991 1995 are obtained by using the parametric approach the degree of technical efficiency was found to be lower than the degree of scale efficiency and thus a greater portion of overall inefficiency is due to producing below the production frontier than to producing at an inefficient scale in addition the vast majority of farms in the sample exhibited suboptimal scale implying that output should be expanded to reach the optimal scale empirical results are provided to determine the impact of various socioeconomic demographic and geoclimatic indicators on technical and scale efficiency

global co2 efficiency country wise estimates using a stochastic cost frontier this paper examines global carbon dioxide co2 efficiency by employing a stochastic cost frontier analysis of about 170 countries in 1997 and 2007 the main contribution lies in providing a new approach to environmental efficiency estimation in which the efficiency estimates quantify the distance from the policy objective of minimum emissions we are able to examine a very large pool of nations and provide country wise efficiency estimates we estimate three econometric models corresponding with alternative interpretations of the cancun vision conference of the parties 2011 the models reveal progress in global environmental efficiency during a preceding decade the estimates indicate vast differences in efficiency levels and efficiency changes across countries the highest efficiency levels are observed in africa and europe while the lowest are clustered around china the largest efficiency gains were observed in central and eastern europe co2 efficiency also improved in the us and china the two largest emitters but their ranking in terms of co2 efficiency deteriorated policy implications are discussed

downsizing in the german chemical manufacturing industry during the 1990s why is small beautiful the german chemical manufacturing industry experienced major downsizing between 1992 and 2004 with the average size of firms shrinking by nearly half during this period this study uses modern frontier efficiency analysis to investigate the determinants of this downsizing based on reliable census data the results of this analysis suggest that firms were not primarily concerned with improving technical efficiency but with establishing an optimal scale of production the proportion of scale efficient firms has been persistently increasing and downsizing is found to be a rational conduct because all scale inefficient firms have continually operated under the decreasing returns portion of technology

optimal membership employment and income distribution in unionized and labor managed firms this article presents a static and dynamic intertemporal analysis of employment and income distribution in unionized and labor managed firms motivated by theoretical considerations and institutional features of western trade unions and labor managed firms we examine firms in which worker members share the risk of layoffs by acting as if compensating laid off members in the static framework we show that although the firms do not behave perversely their behavior depends crucially on the initial membership since the issue of optimal initial membership has been virtually ignored in the literature we analyze it next within a dynamic framework

information production decisions and intra firm bargaining a firm s factor suppliers often receive private signals which are useful in managerial decision making productive efficiency requires the pooling of such decentralized information however factor suppliers may threaten to withhold private signals in order to secure side payments from the potential beneficiaries of this information j harsanyi s theory of the n person cooperative game is applied to a model where both physical inputs and information can be withheld by factor owners for the special case of a binary decision problem the central limit theorem is used to approximate the harsanyi solution by a linear combination of are as under the standard normal curve copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

on illyrian macroeconomics the ward vanek labor managed economy macro models are found to contain errors in capital pricing treatment which when correct ed removes perverse responses and leads to monetary neutrality vanek s 1977 open model is shown not to be a labor managed econ omy model but rather one of any economy with fixed output a rational e xpectations macro model is developed in which labor managed firms mus t decompose price movement into its nominal and real parts this unce rtainty about the information content of observed prices leads to out put effects similar in spirit to the ward vanek models implications for monetary policy are explored copyright 1988 by the london school of economics and political science

multi output efficiency with good and bad outputs abstract cherchye de rock dierynck roodhooft and sabbe 2013 introduced a dea methodology that is specially tailored for multi output efficiency measurement the methodology accounts for jointly used inputs and incorporates information on how inputs are allocated to outputs in this paper we present extensions that render the methodology useful to deal with undesirable or bad outputs in addition to desirable or good outputs interestingly these extensions deal in a natural way with several limitations of existing dea approaches to treat undesirable outputs we also demonstrate the practical usefulness of our methodological extensions through an application to us electric utilities

the value of environment across efficiency quantiles a conditional regression quantiles analysis of rangelands beef production in north eastern australia in agricultural systems the value of environmental inputs can be measured using the production function approach whereby the marginal contributions of factors are associated with a shadow value under perfect competition and rationality assumptions however empirical studies show that inefficiency in production is common indicating that the rationality assumption is not met furthermore substantial evidence exists to suggest that the contributions of environmental inputs in particular may be differentiated across the efficiency distribution this means that the frontier technology may not be an appropriate reflection of the technology in use by inefficient enterprises this article presents the use of conditional regression quantiles to consider how the value of environmental inputs measured by their contributions to production vary across efficiency quantiles we employed a case study of rangelands beef production in australia to consider how environmental health differentially contributes to production values across efficiency quantiles our approach generates detailed insights into the nature of environmentally sourced technical inefficiency and suggests that conditional quantile regression approaches are ideal for consideration of issues wherein substantial heterogeneity exists limiting the information content of conditional mean based analyses

relative wage effects of unions dictatorship and codetermination econometric evidence from germany t he present study estimates the effects of trade unions hitler s regime and codetermination on relative wages in germany i each of these establishments is considered to have had important implications for germany s labor market moreover a thorough understanding of their effects can be valuable for comparative purposes following a brief discussion of these phenomena and their hypothesized effects on wages the analytical model is developed in section ii the empirical results are reported in section iii and section iv contains the summary and conclusions the extensive literature on the relative wage effects of trade unions has focused almost exclusively on the union impact in north america2 and more recently in great britain 3 since the german institutions of industrial and labor relations differ considerably from their angloamerican counterparts4 and often have been studied as a successful possibly superior system which might be adopted by others it is worthwhile exploring the magnitude of the union wage effect in the german institutional setting in particular it has been argued that compared to their american and british counterparts the continental unions tend to place more emphasis on political and social rather than economic achievements 5 if this hypothesis is correct then ceteris paribus the estimated relative wage effect of german unions ought to be smaller than that found in the united states and great britain with the advent of hitler s regime in 1933 there was a dramatic transformation of the existing political and economic institutions trade unions which in 1932 represented over 40 of the industrial labor force were promptly abolished6 and replaced by a government operated labor front 7 strikes and lockouts were forbidden and wages were determined centrally 8 while the effects of these changes on the cultural political and social life have been well documented few economic studies attempted to analyze the effect of hitler s regime on wages and incomes moreover those that did used a qualitative or only a loose quantitative approach partially as a result of the lack of a systematic wage series prior to 1934 9 w krelle 1962 p 17 has shown for example that labor income received for publication july 30 1979 revision accepted for publication may 1 1980 cornell university i would like to thank orley ashenfelter albert rees and two anonymous referees for helpful comments i have also benefited from discussions with j s butler william greene louis phlips and katherine terrell any remaining errors are of course my own this research was in part supported by a grant to the princeton university economics department from the sloan foundation i the term codetermination refers to the german participatory system of management as it was originally established in the federal republic by the 1951 codetermination act and the 1952 works constitution act 2 the most important work and collection of references on the subject is still lewis 1963 among the later studies in the private sector are ashenfelter 1972 ashenfelter and johnson 1972 bloch and kuskin 1978 boskin 1972 de menil 1971 rosen 1969 and schmidt and strauss 1976 public sector studies are summarized by lewin 1977 x see especially pencavel 1974 mulvey 1976 and metcalf 1977 4 needless to say there are important differences between the u s and british systems of industrial and labor relations they exhibit considerable homogeneity however when compared to the systems in continental europe historically the relatively most salient features of the german system have been 1 trade union affiliation with political parties and or religioiis organizations 2 industrial unionism 3 governmental interference in industrial and labor relations and 4 paternalistic management world war ii led to the unification of the formerly splintered unions in the deutsches gewerkschafts bund dgb close collaboration with the social democratic party sdp and the establishment of codetermination for institutional references see almanasreh 1977 fiirstenberg 1969 1977 schregle 1978 and vollmer 1976 1979 5 see kassalow 1969 1980 and windmuller 1969 6 employers associations followed their lead in 1934 7 the labor front included all employees and employers it represented the nazi government in the factories and possessed broad powers over its member subjects 8 in fact the entire economy underwent considerable centralization as hitler proclaimed his first four year plan in 1933 and a second one in 1936 9 among the most thorough and informative of these conventional studies is that of bry 1960 for a discussion of the data see gerss 1977

financing the german mittelstand this paper describes how the german mittelstand or small and medium sized enterprises are financed in germany the role of the german mittelstand both in a static and in a dynamic framework is described and contrasted with that of the same size group in other leading industrialised countries we find that in general the mittelstand has played a mmore important role in germany than in other industrialised nations such as the united states or the united kingdom the traditional success of the german mittelstand is partly attributable to a system of finance that is richly layered by complementary institutions designed to meet the financial needs of both large and smaller enterprises however we find evidence that even under the german system of finance liquidity constraints exist and are greater for smaller firms the german system of finance moreover seems particularly deficient in the channeling of funds to new firm startups in the newer industries

wage bargaining imperfect competition and the markup optimizing microfoundations abstract combining the conjectural variations and nash bargaining approaches it is shown that the demand insensitive markup depends on the bargaining power of unions relative to owners of firms in addition to more standard product market characteristics

outsourcing in a global economy we study the determinants of the location of subcontracted activity in a general equilibrium model of outsourcing and trade we model outsourcing as an activity that requires search for a partner and relationship specific investments that are governed by incomplete contracts the extent of international outsourcing depends inter alia on the thickness of the domestic and foreign market for input suppliers the relative cost of searching in each market the relative cost of customizing inputs and the nature of the contracting environment in each country

productivity growth technical progress and efficiency change in industrialized countries this paper analyzes productivity growth in 17 oecd countries over the period 1979 1988 a nonparametric programming method activity analysis is used to compute malmquist productivity indexes these are decomposed into two component measures namely technical change and efficiency change we find that u s productivity growth is slightly higher than average all of which is due to technical change japan s productivity growth is the highest in the sample with almost half due to efficiency change jel c43 d24 in this paper we apply recently developed

the measurement and sources of technical inefficiency in the indonesian weaving industry production function models are estimated with a time series of cross section data on indonesian weaving establishments the sources of technical inefficiency are investigated three firm attributes are identified as being potentially related to firm efhciency tbey are firm ownership age and size the importance of these attributes as sources of inefficiency in the indonesian weaving industry is investigated and the implications of the find ings discussed

equilibrium long term labor contracts the paper presents a labor market equilibrium analysis of implicit contract theory a two period single good model is used to propose consistent notions of labor market equilibrium for long term employment contracts both when labor is specialized and cannot move in the second period and when there is free mobility without costs the result that long term contracts emerge in equilibrium even without mobility costs is novel and contrary to common beliefs the main features of equilibrium are that risk neutral firms will insure risk averse workers against downside risk yielding downward rigid wages wages are not fully rigid as in earlier work on contract theory because workers may quit and wages have to be bid up to retain them the firm gets its return of the insurance deal by paying less than marginal product in the first period the resulting equilibrium is second best and lies between productive efficiency and full insurance workers gain from long term contracts in comparison to spot markets whereas owners may not in the model with specialized skills there exist transfer payments such that both parties are better off within an equilibrium with long term contracts