Journal Article

How do financial markets affect industrial relations: an institutional complementarity approach

Bruno Amable, Ekkehard Ernst and Stefano Palombarini

in Socio-Economic Review

Published on behalf of Society for the Advancement of Socio-Economics

Volume 3, issue 2, pages 311-330
Published in print May 2005 | ISSN: 1475-1461
Published online May 2005 | e-ISSN: 1475-147X | DOI: http://dx.doi.org/10.1093/SER/mwi013
How do financial markets affect industrial relations: an institutional complementarity approach

More Like This

Show all results sharing these subjects:

  • Moral Philosophy
  • Corporate Social Responsibility
  • Welfare Economics
  • Political Economy
  • Economic Sociology

GO

Show Summary Details

Preview

This article presents a simple formal model of institutional complementarity (IC) applied to industrial relations, and develops two important aspects of IC. We first develop a formal definition for the static and dynamic aspects of IC and then relate these to the interaction between financial relations and the outcome of a wage bargaining between firms and trade unions. Trade unions and firms have the choice between a cooperative negotiation targeting at the long-term success of the firm and a conflictual relation targeting at maximizing the current share. One important determinant in this game will be the time horizon financial investors have as they influence the realization of future gains of cooperation between workers and firms. When financial investors are patient, a pareto-superior cooperative equilibrium can be attained. On the other hand, whenever one of the two bargaining parties gets too weak, the viability even of the long-term equilibrium is threatened.

Keywords: Industrial relations; financial markets; institutional complementarities; JEL classification: G20, J51, J53, N30

Journal Article.  0 words. 

Subjects: Moral Philosophy ; Corporate Social Responsibility ; Welfare Economics ; Political Economy ; Economic Sociology

Full text: subscription required

How to subscribe Recommend to my Librarian

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.