Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/226183
Authors: 
Goerke, Laszlo
Year of Publication: 
2020
Series/Report no.: 
IAAEU Discussion Paper Series in Economics 06/2020
Abstract: 
Trade unions distort a profit-maximising firm's input choice. The nature of the resulting inefficiency depends on whether there are wage negotiations or there is efficient bargaining. Moreover, trade unions redistribute income and thereby affect welfare. If firms also pursue Corporate Social Responsibility (CSR) objectives, input choices may be distorted already in the absence of collective bargaining. Adopting a positive perspective, we show that CSR objectives, which induce a firm to expand production, have ambiguous wage and employment consequences in case of wage negotiations and raise employment if there is efficient bargaining. Importantly from a normative vantage point, such CSR objectives make a welfare-enhancing role of trade unions more likely in the presence of wage negotiations. The reverse is true in case of efficient bargaining.
Subjects: 
Corporate Social Responsibility
Efficient Bargaining
Trade Unions
Wage Bargaining
Welfare
JEL: 
D60
J51
L31
M14
Document Type: 
Working Paper

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