Employer Cooperation, Productivity, and Wages: New Evidence from Inter-Firm Formal Network Agreements

Francesco Devicienti (), Elena Grinza, Alessandro Manello () and Davide Vannoni
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Alessandro Manello: University of Turin

No 15617, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using uniquely rich administrative matched employer-employee data, we investigate the impact of formal network agreements (FNAs) among firms under two perspectives. First, we assess the impact of joining a FNA on several indicators of firm performance, and total factor productivity. Second, we investigate whether and how such effects are transmitted to the workers, in terms of wage changes. On the firm-level side, we find an overall significant and economically relevant positive effect of FNAs on firm performance, which resists a large set of robustness tests. However, such a positive effect on firms does not translate into tangible benefits for the workers, on average. After estimating an array of multiple-way fixed effects wage regressions, we find a negative, though small, wage effect. Moreover, we detect a rather marked heterogeneity in the impacts on both firms and workers. The estimation of rent-sharing equations, as well as other tests that exploit unionization data, suggest that the negative effects on wages might be explained by a decrease in workers' bargaining power following the introduction of FNAs.

Keywords: total factor productivity (TFP); firm performance; formal network agreements; Inter-firm cooperation; wages; matched employer-employee data (search for similar items in EconPapers)
JEL-codes: D24 J31 L14 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2022-10
New Economics Papers: this item is included in nep-bec, nep-eff, nep-eur, nep-hrm, nep-lma and nep-sbm
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Published - published in: Economica, 2025, 92 (365), 1 - 41

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Journal Article: Employer cooperation, productivity and wages: new evidence from inter‐firm formal network agreements (2025)
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