Insider power and wage setting in transition: Evidence from a panel of large Polish firms, 1988–1994

Grosfeld, Irena; Nivet, Jean-François

doi:10.1016/s0014-2921(98)00121-4

Cited by 28 publications

(49 citation statements)

References 12 publications

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“…They are similar to those found for Poland by other researchers. Comparing with previous results on Poland, we may see, that Grosfeld and Nivet (1999) reported sales per employee elasticity of wage at 0.14 for early transition period and Mickiewicz and Bishop (2003) Turning to alternative wage, we may see that the sectoral wage is consistently significant (with elasticity estimates in a range of 0.14-0.15), and so is unemployment (elasticity between -0.12-0.14). Combining both variables into one proxy of reservation wage lead to estimate of elasticity (0.15), which is in a very similar to range.…”

Section: Discussionsupporting

confidence: 52%

“…This variable was utilised in seminal paper by Nickell and Wadhwani (1990) and applied in the transition economies context by Grosfeld and Nivet (1999), Basu et al (2000), Christev and Fitzroy (2002) and Mickiewicz and Bishop (2003). In particular, when the specification is augmented by sectoral wages, the difference between revenue per employee and prevailing sector 4 In particular we will follow typical design and approximate the model by log-linear specification.…”

Section: Ability To Paymentioning

confidence: 99%

“…In particular, Blanchflower (1990) found that four alternative measures of unemployment and employmentsome in levels, and some in first differences are negatively and significantly related to annual earnings. Grosfeld and Nivet (1999) regress first difference of wages againstalternatively -both the level of regional unemployment and the first difference in regional unemployment (for Poland), while Mickiewicz and Bishop (2003) use the latter specification. Duffy and Walsh (2001) and Kertesi and Köllő (1999) Sweden, Finland and Germany, yet positive for Norway and the USA.…”

Section: 2outside Optionsmentioning

confidence: 99%

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Wage Bargaining, Privatisation, Ability to Pay and Outside Options: Evidence from Hungary

Köllő

Mickiewicz

2005

Post-Communist Economies

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This paper examines the determinants of short-term wage dynamics, using a sample of large Hungarian companies for the period of 1996-1999. We test the basic implications of an efficient contract model of bargaining between the incumbent employees and the managers, which we are unable to reject. In particular, there are structural differences between the ownership sectors consistent with our prior knowledge on relative bargaining strength and unionisation measures. Stronger bargaining position of workers leads to higher ability to pay elasticity of wages, and lower outside option elasticity. Our results indicate that while bargaining position of workers in domestic privatised firms may be weaker than in the state sector, the more robust difference relate to state sector workers versus the privatised firms with the majority foreign ownership. We examine several extensions. We augment the bargaining specification by controls related to workers' skills and find that the basic findings are robust to that. We take a closer look at the outside options of the workers. We find some interactive effects, where unemployment modify the impact of availability of rents on wages. We interpret our results as an indication that bargaining power of workers may be affected by changes in their outside options. We also experiment with one concise indicator of reservation wage which is closest to the theoretical model specification and combines sectoral wages, unemployment benefits and regional unemployment levels,. We found that measure performing well. Finally, we found that while responsiveness of wages towards ability to pay is higher in the state sector, variation in wage dynamics is lower. This may indicate some wage smoothing in the state sector, consistent with the preferences of employees.

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Section: Discussionsupporting

confidence: 52%

Section: Ability To Paymentioning

confidence: 99%

Section: 2outside Optionsmentioning

confidence: 99%

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Wage Bargaining, Privatisation, Ability to Pay and Outside Options: Evidence from Hungary

Köllő

Mickiewicz

2005

Post-Communist Economies

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“…Capitalist nature of contemporary markets endangers the entitlement of workers to receive a rent in exchange for exploitation of their skills (Bowles and Gintis, 1975;Grosfeld and Nivet, 1999). Employees earn wages for their work and learn some skills, while working at MNEs' subsidiaries.…”

Section: The Allocation Of Upside and Downside Risks Among Stakeholdersmentioning

confidence: 99%

Risks and Transfer Pricing Regulation at the Multinational Enterprises' Routine Units: A Literature Review

Buus¹

2018

Prague Economic Papers

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Multinational enterprises (MNE) allocate valuable intangible assets and strategic functions to the strategy units (usually parent companies) for that allows them to impropriate the majority of the profits there and protect those assets from subsidiaries' risks. The subsidiaries are frequently routine units. Subsequently, the routine units receive low reward, as they perform only routine functions. The OECD transfer pricing guidelines support that practice to the detriment of government budgets and public by considering the routine units as the low-risk ones. This paper reviews the relevant literature and shows that the traditional view of risk and profit allocation between strategy and routine units is inconsistent with their relative risks, resp. with relative risks of MNE's subsidiary and independent company. The long-term perspective of MNEs' members' downside risks provides correct information for transfer pricing regulation and fiscal authorities. Results of this paper enable proposal of the transfer pricing risk analysis targets and tools.

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“…1 To our knowledge, there exists little or no documented theoretical understanding of the link between …rm ownership and rent sharing, and so far, the empirical evidence on this relationship is fairly scant and also geographically narrow, almost exclusively limited to economies from Eastern Europe. For example, Grosfeld and Nivet (1999), Dobbeleare (2004) and Luke and Scha¤er (2000) explore this relationship in Poland, Bulgaria and Russia, respectively. Monteiro and Portela (2010) is one exception, but their analysis is con…ned to a speci…c economic industry (banking) in a Western European economy (Portugal).…”

Section: Introductionmentioning

confidence: 99%

Firm Ownership and Rent Sharing

2011

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In this paper we analyse -theoretically and empirically -how the degree of private versus public ownership of …rms a¤ects the degree of rent sharing between …rms and their workers. Using a particularly rich linked employer-employee dataset from Portugal, covering a large number of corporate ownership changes across a wide spectrum of economic sectors over more than 20 years, we …nd that rent sharing is signi…c-antly higher in …rms with a larger share of private ownership. Estimates from our most preferred empirical speci…cation suggest that an increase in the private ownership share of 10 percentage points increases (on average) the rent-sharing elasticity by 0.0002. Based on a theoretical analysis that incorporates union-…rm wage bargaining and e¢ ciency wage e¤ects within the same modelling framework, this result cannot be explained by private …rms being more pro…t oriented than public ones. However, the result is consistent with a scenario whereby privatisation leads to less job security for workers, implying stronger e¢ ciency wage e¤ects.

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Insider power and wage setting in transition: Evidence from a panel of large Polish firms, 1988–1994

Cited by 28 publications

References 12 publications

Wage Bargaining, Privatisation, Ability to Pay and Outside Options: Evidence from Hungary

Wage Bargaining, Privatisation, Ability to Pay and Outside Options: Evidence from Hungary

Risks and Transfer Pricing Regulation at the Multinational Enterprises' Routine Units: A Literature Review

Firm Ownership and Rent Sharing

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