Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289758 
Year of Publication: 
2024
Series/Report no.: 
IAAEU Discussion Paper Series in Economics No. 01/2024
Publisher: 
University of Trier, Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier
Abstract: 
If a profit-maximising firm credibly commits to an employment-enhancing Corporate Social Responsibility (CSR) objective in negotiations with a trade union, the union can reduce its wage demands. Lower wages, ceteris paribus, raise profits, while the increase in employment enhances the payoff of a wage-setting trade union. Therefore, both the firm and the trade union can be better off in the presence of a collectively bargained CSR-objective than in its absence. Accordingly, establishing a CSR-objective can give rise to a Pareto-improvement and can mitigate the inefficiency resulting from collective wage negotiations.
Subjects: 
Collective Bargaining
Corporate Social Responsibility
Employment
ParetoImprovement
Trade Union
Wages
JEL: 
D60
J51
M14
Document Type: 
Working Paper

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