Shareholder Bargaining Power and the Emergence of Empty Creditors
Journal of Financial Economics,
Credit default swaps (CDSs) can create empty creditors who potentially force borrowers into inefficient bankruptcy but also reduce shareholders’ incentives to default strategically. We show theoretically and empirically that the presence and the effects of empty creditors on firm outcomes depend on the distribution of bargaining power among claimholders. If creditors would face powerful shareholders in debt renegotiation, firms are more likely to face the empty creditor problem. The empirical evidence confirms that more CDS insurance is written on firms with strong shareholders and that CDSs increase the bankruptcy risk of these same firms. The ensuing effect on firm value is negative.
Price-cost Margin and Bargaining Power in the European Union
IWH-CompNet Discussion Papers,
Using firm-level data between 2004 and 2012 for eleven countries of the European Union (EU), we document the size of product and labour market imperfections within narrowly defined sectors including services which are virtually undocumented. Our findings suggest that perfect competition in both product and labour markets is widely rejected. Levels of the price-cost margin and union bargaining power tend to be higher in some service sectors depicting however substantial heterogeneity. Dispersion within sector and across countries tends to be higher in some services sectors assuming a less tradable nature which suggests that the Single Market integration is partial particularly relaxing the assumption of perfect competition in the labour market. We report also figures for the aggregate economy and show that Eastern countries tend to depict lower product and labour market imperfections compared to other countries in the EU. Also, we provide evidence in favour of a very limited adjustment of both product and labour market imperfections following the international and financial crisis.
Industrial Relations: Worker Codetermination and Collective Wage Bargaining
Jahrbücher für Nationalökonomie und Statistik,
Trade unions and employers’ associations, collective bargaining, and employee representation at the workplace are the cornerstones of industrial relations systems in many developed countries. Germany stands out as a country with powerful works councils and a high coverage rate of collective bargaining agreements, supported by encompassing interest groups of employees and employers and by the state. The German case and the perceived stability of its industrial relations regime have attracted considerable attention among researchers and politicians, which also has to do with the country’s high productivity, comparably few strikes, and relatively minor employment problems. However, in recent years industrial relations in many countries including Germany have come under pressure and the fact that there is no obvious and clearly superior alternative to the current regime of industrial and labour relations may not be sufficient to guarantee the survival of the present system.
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Size of Training Firms and Cumulated Long-run Unemployment Exposure – The Role of Firms, Luck, and Ability in Young Workers’ Careers ...
IWH-CompNet Discussion Papers
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Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany
IWH Discussion Papers,
This paper investigates the influence of industrial relations on firm wage premia in Germany. OLS regressions for the firm effects from a two-way fixed effects decomposition of workers’ wages by Card, Heining, and Kline (2013) document that average premia are larger in firms bound by collective agreements and in firms with a works council, holding constant firm performance. RIF regressions show that premia are less dispersed among covered firms but more dispersed among firms with a works council. Hence, deunionisation is the only among the suspects investigated that contributes to explaining the marked rise in the premia dispersion over time.
What Can We Learn from Bargaining Models about Union Power? The Decline in Union Power in Germany, 1992–2009
The Manchester School,
Building on the right-to-manage model of collective bargaining, this paper tries to infer union power from the observed results in wage setting. It derives a time-varying indicator of union strength taking account of taxation, unemployment benefits, and the labour market situation and confronts this indicator with annual data for Germany. The results show that union power did not change much from 1992 to 2002 but fell markedly (by about one-third) from 2002 to 2007 in the aftermath of substantial labour market reforms.
Folgen des Wettbewerbs zwischen Krankenversicherungen für die Kosten im Gesundheitswesen
Gesundheitspolitik, Wettbewerb und Gesundheitssystemforschung. DIBOGS-Beiträge zur Gesundheitsökonomie und Sozialpolitik Bd. 3,
In this study it is argued that competition among health insurers can bring about higher costs in the health care sector. Medical services are inhomogeneous goods; thus the competition between physicians can be modeled by Chamberlins concept of monopolistic competition. The physicians have a strong bargaining power face to face a multitude of competing health insurers acting as purchasers of health care services. The costs can be lower if the physicians’ strong position is compensated by a monopolistic health insurer. Two case studies show the applicability of the argument. A regression analysis confirms the correlation between (public) monopolistic health insurer and lower costs in the health care sector.