Escaping social pressure: Fixed-term contracts in multi-establishment firms

Andrea Bassanini, Eve Caroli, Francois Fontaine and Antoine Rebérioux ()
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Antoine Rebérioux: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, LADYSS - Laboratoire Dynamiques Sociales et Recomposition des Espaces - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité

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Abstract: We develop a simple theoretical model showing that, by adding to the adjustment costs associated with permanent contracts, local social pressure against dismissals creates an incentive for CEOs to rely on fixed-term contracts, in an attempt to escape social pressure. Using linked employer-employee data, we show that establishments located closer to headquarters have higher shares of fixed-term contracts in hiring than those located further away whenever firms' headquarters are located in self-centered communities and the CEO not only works but also lives there. We show that these findings can only be explained by local social pressure.

Keywords: Social pressure; Employment contracts; Adjustment costs; CEO reputation (search for similar items in EconPapers)
Date: 2021-08
Note: View the original document on HAL open archive server: https://hal.science/hal-03353701v1
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Published in Journal of Economic Behavior and Organization, 2021, 188, pp.697-715. ⟨10.1016/j.jebo.2021.05.027⟩

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Related works:
Journal Article: Escaping social pressure: Fixed-term contracts in multi-establishment firms (2021)
Working Paper: Escaping social pressure: Fixed-term contracts in multi-establishment firms (2021)
Working Paper: Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms (2021)
Working Paper: Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms (2021)
Working Paper: Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms (2021)
Working Paper: Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms (2019)
Working Paper: Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03353701

DOI: 10.1016/j.jebo.2021.05.027

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