News

New Publication in Economic Modelling

Recent research by Professor Schmerer accepted for publication in "Economic Modelling".

The paper "Trade and Unions: Does Size Matter?" was accepted for publication in the journal "Economic Modelling". This project is joint work with a former member of the chair, Stella Capuano, and Andreas Hauptman from the Institute for Employment Research in Nürnberg.

Among all Economics journal, Economic Modelling is ranked in the best quartile according to the ranking of SCIMAGO:

Abstract:

Our empirical analysis builds upon the hypothesis that unions are detrimental to a firm’s efficiency. Using a rich survey of German manufacturers, we investigate firm-level determinants on the probability of collective wage bargaining with particular focus on the impact of a firm’s engagement in foreign markets. An interesting and very robust finding is that exporters are less likely to engage in union wage bargaining. This finding is in line with a pessimistic perception of unions. The negative effect of collective bargaining can be offset by efficiency gains for larger exporters, who can benefit from operation cost saving effects. Size does matter as larger firms export and may find bargaining with a single entity representing the workforce more convenient than bargaining with each worker individually. We are using firm level information on IT investment as instrument for the export dummy and successfully test for the validity of this instrument.