Article

Temporary Agency Work and Firm Competitiveness: Evidence from German Manufacturing Firms

Industrial Relations A Journal of Economy and Society (Impact Factor: 1.48). 06/2011; 53(3). DOI: 10.2139/ssrn.1898546

ABSTRACT This paper addresses the relationship between the utilization of temporary agency workers by firms and their competitiveness measured by unit labor costs, using a rich, newly built, data set of German manufacturing enterprises. The analysis is conducted by applying different panel data models while taking the inherent selection problem into account. Making use of dynamic panel data models allows us to control for firm specific fixed effects as well as for potential endogeneity of explanatory variables. The results indicate a U-shaped relationship between the extent that temporary agency workers are used and the competitiveness of firms.

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    ABSTRACT: This study compares French and German manufacturing price levels in 2007 and investigates in both countries over the 1991-2010 period value added price growth rates in manufacturing and services. Using the ICOP methodology and the data from the Eurostat production surveys, we calculate production price levels in the French and German manufacturing sector. Results show they are quite close to each other. As to growth rates, using national accounts data, while German manufacturing value added prices have been relatively stable between 1995 and 2010, French manufacturing prices have been falling. This relative decrease could be attributed to the relative fall in the French gross margins over the last years. This gap is not replicated in the aggregate value added prices. The latter have been rising more steeply in France than in Germany, and this is due to price fluctuations in services. The increase in the French compensation rate in services has been significantly larger than the hourly labour productivity. In Germany, with falling unit labour costs over the 2005-2007 years in the manufacturing sector, German firms could hoard substantial gross margins that, however, have only been partly allocated to investment.

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