The Productivity Effects of Participatory Employment Practices: Evidence from New Japanese Panel Data

Colgate Discussion Paper No. 97-04

Posted: 7 Jul 1998

See all articles by Takao Kato

Takao Kato

Colgate University - Economics Department; IZA Institute of Labor Economics

Motohiro Morishima

Keio University - Faculty of Policy Management

Multiple version iconThere are 2 versions of this paper

Date Written: 1998

Abstract

This paper uses new Japanese panel data to estimate the impact on productive efficiency of human resource management practices (HRMPs) designed to promote information sharing at the top level and at the grass roots level, and financial participation. These include joint labor-management committees at the corporate level and at the shop-floor level and financial participation schemes, such as employee stock ownership plans and profit sharing plans. By merging data from a new survey concerning HRMPs among publicly held Japanese firms with corporate proxy statement data, we create for the first time an enterprise-level panel data set for up to 152 Japanese manufacturing firms that provides information annually for 1973-92 on these HRMPs. The data are then used to estimate production functions augmented by variables to capture the effects of groups of HRMPs. We find evidence for the importance of introducing groups of HRMPs in three areas: (i) information sharing at the top level; (ii) information sharing at the grass roots level; and (iii) financial participation. Specifically, moving from the traditional system of no participatory HRMP's to a highly participatory system with HRMP's in all three areas lead to a significant 9-percent increase in productivity. The full productivity effect is, however, felt only after a long developmental phase (10 years). At the same time, we find no evidence for significant productivity gains from changing the industrial relations system from the traditional system to any intermediate systems which lack HRMPs in any one of the three areas.

JEL Classification: J5, J33, J24, L2, M11, O53

Suggested Citation

Kato, Takao and Morishima, Motohiro, The Productivity Effects of Participatory Employment Practices: Evidence from New Japanese Panel Data (1998). Colgate Discussion Paper No. 97-04, Available at SSRN: https://ssrn.com/abstract=92668

Takao Kato (Contact Author)

Colgate University - Economics Department ( email )

13 Oak Drive
Hamilton, NY 13346
United States
315-228-7562 (Phone)
315-228-7033 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Motohiro Morishima

Keio University - Faculty of Policy Management ( email )

Fujisawa Kanagawa, 252
Japan
0466-47-5111 ext.3035 (Phone)
0466-47-5041 (Fax)

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