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Grupo de Estudos Monetários e Financeiros

Estudos do GEMF, N.º 03 de 2005


The Determinants of Firm Performance: Unions, Works Councils,

and Employee Involvement/High Performance Work Practices

John T. Addison
University of South Carolina (U.S.A.); GEMF/Universidade de Coimbra (Portugal);
and IZA Bonn (Alemanha)

Drawing on international evidence, this paper offers a survey of the effects of worker representation (in unions and works councils) and innovative work practices on firm performance. The focus is on the growing links between these two historically separate literatures. The interaction between worker representation and high performance work practices provides a practical means of peering inside the black box of collective voice, even if there is as yet no well-determined hierarchy for productivity performance and certainly no blue-print for the future of unions.

JEL Classification: J51, J53, M54.

Keywords: Worker representation, employee involvement mechanisms, innovative work practices, training, firm/establishment performance.

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