Journal Article

Labour Unrest and the Quality of Production: Evidence from the Construction Equipment Resale Market

Alexandre Mas

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 75, issue 1, pages 229-258
Published in print January 2008 | ISSN: 0034-6527
Published online January 2008 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1111/j.1467-937X.2007.00461.x
Labour Unrest and the Quality of Production: Evidence from the Construction Equipment Resale Market

More Like This

Show all results sharing these subjects:

  • Manufacturing
  • Labour-Management Relations, Trade Unions, and Collective Bargaining

GO

Show Summary Details

Preview

This paper examines the construction equipment resale market to assess whether equipment produced by the world's largest manufacturer of construction machinery, Caterpillar, experienced lower product quality in facilities that underwent contract disputes during the 1990's. Analysis of auction data reveals that resale market participants significantly discounted machines produced in these dispute-affected facilities. Additionally, pieces of equipment produced in facilities undergoing unrest were resold more often, received worse appraisal reports, and had lower list prices. Taken together, the evidence supports the hypothesis that workmanship at dispute-affected facilities declined and that the resulting impact on the economic quality of the equipment produced was significant. The dispute was associated with at least $400 million in lost service flows due to inferior quality equipment alone.

Keywords: J52; L64

Journal Article.  15085 words.  Illustrated.

Subjects: Manufacturing ; Labour-Management Relations, Trade Unions, and Collective Bargaining

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.