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Labour Relations Quality and Productivity: An Empirical Analysis on French Firms

Gilbert Cette (), Nicolas Dromel () and Remy Lecat ()

Review of Economics and Institutions, 2013, vol. 4, issue 2

Abstract: We empirically characterise how good labour relations can alleviate the negative impact on productivity of regulatory constraints or workforce opposition. The estimates are based on a unique survey of French manufacturing firms collected by the Banque de France over the period 1991-2008. Our main results may be summarised as follows: i) ‘workforce or union opposition’ interacted with ‘regulatory constraints’ has a negative significant impact on total factor productivity (TFP). When this interaction is not taken into account, a deteriorated labour climate, through workforce or union opposition, weighs directly on TFP. But when this interaction is taken into account, this negative impact relies solely on the combination of regulatory constraints and labour opposition: workers or unions can successfully oppose management’s decisions and weigh on TFP when they can use or threaten to use appropriate regulation; otherwise, their opposition may be harmless; ii) ‘regulatory constraints’ interacted with ‘branch or firm agreement’ has a positive significant impact on TFP. These agreements, which can only be obtained if labour relations are supportive, would be used by firms to offset the negative impact of regulatory constraints. This favourable impact can be obtained through two channels: first, informally, a good labour climate can lead to a flexible implementation of regulation; second, formally, the French labour code incorporates provisions that allow firm or branch agreements to adapt or even alleviate the constraints of regulation. These results emphasise that the implementation of regulatory constraints and their impact on productivity crucially hinges on the quality of labour climate.

Keywords: labour relations; collective bargaining; trade unions; productivity (search for similar items in EconPapers)
JEL-codes: J53 J52 J51 (search for similar items in EconPapers)
Date: 2013
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Related works:
Working Paper: Labour Relations Quality and Productivity: an Empirical Analysis on French Firms (2013)
Working Paper: Labour Relations Quality and Productivity: an Empirical Analysis on French Firms (2013)
Working Paper: Labour Relations Quality and Productivity: an Empirical Analysis on French Firms (2013)
Working Paper: Labour Relations Quality and Productivity: an Empirical Analysis on French Firms (2013)
Working Paper: Labour Relations Quality and Productivity: an Empirical Analysis on French Firms (2013)
Working Paper: Labour Relations Quality and Productivity: an Empirical Analysis on French Firms (2013)
Working Paper: Labour Relations Quality and Productivity: an Empirical Analysis on French Firms (2013)
Working Paper: Labour relations quality and productivity: An empirical analysis on French firms (2012) Downloads
Working Paper: Labour relations quality and productivity: An empirical analysis on French firms (2012) Downloads
Working Paper: Labour relations quality and productivity: An empirical analysis on French firms (2012) Downloads
Working Paper: Labour relations quality and productivity: An empirical analysis on French firms (2012) Downloads
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