Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149151
Authors: 
Devicienti, Francesco
Manello, Alessandro
Vannoni, Davide
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 10292
Abstract: 
This paper explores the link between the presence of unions in the workplace, the adoption of decentralized labor agreements and technical efficiency, using a large sample of Italian manufacturing firms. We apply the Data Envelopment Analysis, and its robust version based on bootstrap theory, to get reliable estimates of technical efficiency at the firm level in a standard first stage. We devote particular attention to the specific technology adopted, by distinguishing 20 different sector frontiers, as well as to the presence of outliers. The obtained efficiency scores are analyzed in a second stage applying a truncated regression model estimated via Maximum Likelihood, following the Simar and Wilson (2007, 2011) methodology. Our results highlight that the presence of workplace unionization decreases the level of technical efficiency, while aspects limiting the unions' power such as a strong exposure to international markets, high debt levels or the prevalence of flexible assets partially reduce the negative effect. However, when firms adopt decentralized labor contracts agreements, the effect on efficiency is positive and partially compensates the negative unions' effect. The results are robust to the inclusion of many firm characteristics and to different model specifications.
Subjects: 
technical efficiency
trade unions
decentralized bargaining
data envelopment analysis
truncated regression model
JEL: 
J51
D22
D24
C24
C44
Document Type: 
Working Paper

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