Works Councils and Other Plant-specific Forms of Employee Participation – Substitutes or Complements?
Stefan Ertelt, Boris Hirsch, Claus Schnabel
Industrielle Beziehungen,
No. 3,
2017
Abstract
Using data from the IAB Establishment Panel (2004-2013), this paper analyses the incidence, development and interdependence of works councils and other, typically managementinitiated forms of employee participation (such as round tables) in Germany. In the private sector, the incidence of works councils and other forms of participation is similar, but in very few establishments both bodies exist simultaneously. Econometric analyses based on recursive probit models indicate that partly different factors explain the existence of works councils and other forms of participation. Both bodies correlate negatively with respect to their incidence, foundation, and dissolution. This suggests that there exists a predominantly substitutive relationship between works councils and other forms of employee participation.
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Real Effects of Bank Capital Regulations: Global Evidence
Yota D. Deli, Iftekhar Hasan
Journal of Banking and Finance,
2017
Abstract
We examine the effect of the full set of bank capital regulations (capital stringency) on loan growth, using bank-level data for a maximum of 125 countries over the period 1998–2011. Contrary to standard theoretical considerations, we find that overall capital stringency only has a weak negative effect on loan growth. In fact, this effect is completely offset if banks hold moderately high levels of capital. Interestingly, the components of capital stringency that have the strongest negative effect on loan growth are those related to the prevention of banks to use as capital borrowed funds and assets other than cash or government securities. In contrast, compliance with Basel guidelines in using Basel- and credit-risk weights has a much less potent effect on loan growth.
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Predicting the Rise of EU Right-Wing Populism in Response to Unbalanced Immigration
Marko Jusup, Dejan Kovač, Boris Podobnik, H. Eugene Stanley
Complexity,
August
2017
Abstract
Among the central tenets of globalization is the free migration of labor. Although much has been written about the benefits of globalization, little is known about its limitations and how antiglobalist sentiment can be strongly affected by high levels of immigration. Analyzing poll data from a group of EU countries affected by the recent migrant crisis, we find that over the last three years the percentage of right-wing (RW) populist voters in a given country depends on the prevalence of immigrants in this country’s population and the total immigration inflow into the entire EU. The latter is likely due to the perception that the EU functions as a supranational state in which a lack of inner borders means that “someone else’s problem” can easily become “my problem.” We find that the increase in the percentage of RW voters substantially surpasses the percentage of immigration inflow, implying that if this process continues, ongoing democratic processes will cause RW populism to prevail and globalization to rapidly decrease. We locate tipping points between the fraction of immigrants and the rise of RW populism, and we model our empirical findings using a complex network framework in which the success of globalization rests on a balance between immigration and immigrant integration.
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09.08.2017 • 29/2017
Networked and protected
During the financial crisis, billions were spent to rescue banks that were according to their governments too big to be allowed to fail. But a study by Michael Koetter from the Halle Institute for Economic Research (IWH) and co-authors shows that besides the size of the banks, the centrality within the global financial network was also pivotal for financial institutions to receive a bail-out.
Michael Koetter
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Central Bank Transparency and Cross-border Banking
Stefan Eichler, Helge Littke, Lena Tonzer
Journal of International Money and Finance,
2017
Abstract
We analyze the effect of central bank transparency on cross-border bank activities. Based on a panel gravity model for cross-border bank claims for 21 home and 47 destination countries from 1998 to 2010, we find strong empirical evidence that a rise in central bank transparency in the destination country, on average, increases cross-border claims. Using interaction models, we find that the positive effect of central bank transparency on cross-border claims is only significant if the central bank is politically independent and operates in a stable economic environment. Central bank transparency and credibility are thus considered complements by banks investing abroad.
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15.06.2017 • 26/2017
Ailing banks increase leverage of ailing firms
Euro area countries such as Greece and Spain continue to struggle not only with their banks, but also with highly indebted domestic firms. Michael Koetter from the Halle Institute for Economic Research (IWH) and co-authors show the failure to resolve banks’ financial difficulties also prevents debt reduction of over-leveraged firms – and sometimes even contributes to increasing leverage of the weakest firms.
Michael Koetter
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The Dynamic Effects of Works Councils on Plant Productivity: First Evidence from Panel Data
Steffen Müller, Jens Stegmaier
British Journal of Industrial Relations,
No. 2,
2017
Abstract
We estimate dynamic effects of works councils on labour productivity using newly available information from West German establishment panel data. Conditioning on plant fixed effects and control variables, we find negative productivity effects during the first five years after council introduction but a steady and substantial increase in the councils’ productivity effect thereafter. Our findings support a causal interpretation for the positive correlation between council existence and plant productivity that has been frequently reported in previous studies.
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Wage Bargaining Regimes and Firms‘ Adjustments to the Great Recession
Filippo di Mauro, Maddalena Ronchi
IWH-CompNet Discussion Papers,
No. 1,
2017
Abstract
The paper aims at investigating to what extent wage negotiation set-ups have shaped up firms’ response to the Great Recession, taking a firm-level cross-country perspective. We contribute to the literature by building a new micro-distributed database which merges data related to wage bargaining institutions (Wage Dynamic Network, WDN) with data on firm productivity and other relevant firm characteristics (CompNet). We use the database to study how firms reacted to the Great Recession in terms of variation in profits, wages, and employment. The paper shows that, in line with the theoretical predictions, centralized bargaining systems – as opposed to decentralized/firm level based ones – were accompanied by stronger downward wage rigidity, as well as cuts in employment and profits.
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The Political Determinants of Government Bond Holdings
Stefan Eichler, Timo Plaga
Journal of International Money and Finance,
No. 5,
2017
Abstract
This paper analyzes the link between political factors and sovereign bond holdings of US investors in 60 countries over the 2003–2013 period. We find that, in general, US investors hold more bonds in countries with few political constraints on the government. Moreover, US investors respond to increased uncertainty around major elections by reducing government bond holdings. These effects are particularly significant in democratic regimes and countries with sound institutions, which enable effective implementation of fiscal consolidation measures or economic reforms. In countries characterized by high current default risk or a sovereign default history, US investors show a tendency towards favoring higher political constraints as this makes sovereign default more difficult for the government. Political instability, characterized by the fluctuation in political veto players, reduces US investment in government bonds. This effect is more pronounced in countries with low sovereign solvency.
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The Effects of Local Elections on National Military Spending: A Cross-country Study
Liuchun Deng, Yufeng Sun
Defence and Peace Economics,
No. 3,
2017
Abstract
In this paper, we study the domestic political determinants of military spending. Our conceptual framework suggests that power distribution over local and central governments influences the government provision of national public goods, in our context, military expenditure. Drawing on a large cross-country panel, we demonstrate that having local elections will decrease a country’s military expenditure markedly, controlling for other political and economic variables. According to our preferred estimates, a country’s military expenditure is on average 20% lower if its state government officials are locally elected, which is consistent with our theoretical prediction.
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