Board‐Level Employee Representation (Bler) and Firms’ Responses to Crisis

47 Pages Posted: 23 May 2020

See all articles by Aleksandra Gregorič

Aleksandra Gregorič

University of Ljubljana - Faculty of Economics

Marc Steffen Rapp

University of Marburg - School of Business & Economics; University of Marburg - Marburg Centre for Institutional Economics (MACIE)

Date Written: July 2019

Abstract

Short: We hypothesize that companies with board‐level employee representation (BLER) experience a lower probability of crisis‐induced dismissals than other firms. Theoretically, we link this effect to the employee directors’ ability to reduce the information asymmetry and moral hazard in employee–employer contracting, thereby facilitating the implementation of labor‐cost adjustments that are an alternative to workforce dismissals. We confirm our hypotheses by analyzing the behavior of Scandinavian public corporations with/without employee directors during the Great Recession.

Suggested Citation

Gregorič, Aleksandra and Rapp, Marc Steffen, Board‐Level Employee Representation (Bler) and Firms’ Responses to Crisis (July 2019). Industrial Relations: A Journal of Economy and Society, Vol. 58, Issue 3, pp. 376-422, 2019, Available at SSRN: https://ssrn.com/abstract=3602956 or http://dx.doi.org/10.1111/irel.12241

Aleksandra Gregorič (Contact Author)

University of Ljubljana - Faculty of Economics

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia

Marc Steffen Rapp

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany

University of Marburg - Marburg Centre for Institutional Economics (MACIE) ( email )

Am Plan
Marburg, 35032
Germany

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