Works councils and environmental investment: Theory and evidence from German panel data

Abstract

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Reciprocity and Workers’ Tastes for Representation

“…Several reasons suggest that specifically workers with negative reciprocal inclinations should be interested in worker representation. Theoretical models stress that organizations of worker representation protect workers' interest by monitoring the employer (Askildsen et al 2006, Freeman and Lazear 1995, Smith 1991 and punishing employer opportunism (Hogan 2001). Empirical research confirms that works councils are more likely to be introduced by the workforce if the employer has a strong incentive to behave opportunistically (Jirjahn 2009, Kraft and Lang 2008, Mohrenweiser et al 2011.…”

Non-union worker representation, foreign owners, and the performance of establishments

“…This is documented by a remarkably increasing number of econometric studies on the consequences of German works councils. Recent examinations typically obtain neutral or positive effects on training, employee retention, productivity, innovation, family friendly practices, and the use of performance pay (Addison et al, 2001;Jirjahn, 2002, 2009;Frick and Moeller, 2003;Huebler and Jirjahn, 2003;Askildsen et al, 2006;Smith, 2006;Kraft, 2007, 2011;Wagner, 2008;Pfeifer, 2011;Mueller, 2012). Yet, sociological case studies indicate that councils do not automatically live up to their potential (Frege, 2002).…”

Disentangling Specific Subsets of Innovations: A Micro-Econometric Analysis of their Determinants

“…In addition, the dummy "One facility" which takes the value one if the firm consisted of only one facility, is also incorporated. This variable can be considered an indicator for reduced technological opportunities to use inter-firm spillover effects, so that negative effects of it on innovations are likely (e.g., Askildsen et al, 2006). Moreover, R&D is a key indicator for technological capabilities comprising physical and knowledge capital stock of a firm, and therefore seems to be a major input into the innovation process (e.g., Baldwin et al, 2002), so that it should strongly affect innovation output.…”

“…participation in international competition (e.g., Czarnitzki and Kraft, 2004a), has a positive impact on innovation behaviour. We consider two dummies, "Main market abroad" and "Exports", which take the value one, respectively, if the 6 main market was abroad (and not national or regional, e.g., Askildsen et al, 2006) in the last three years and if the firm exported.…”

“…As a consequence, the determinants of general product and process innovations (e.g., Flaig and Stadler, 1994, Baldwin et al, 2002, Cabagnols and Le Bas, 2002, Martínez-Ros and Labeaga, 2002, Labeaga and Martínez-Ros, 2005, including both environmental and non-environmental innovations, respectively, as well as the specific determinants of environmental product and process innovations (e.g., Ziegler and Rennings, 2004, Wagner, 2007 have also been separately micro-econometrically analyzed. By focusing on the effect of works councils, Askildsen et al (2006) furthermore consider both the determinants of environmental product innovations, as well as the determinants of product and process innovations in general. However, their study neither examines environmental process nor nonenvironmental innovations.…”