Arbeitspapier
Capital Structure, Wage Bargaining and Employment
We offer a unified framework to analyze the determination of employment, employee effort, wages, profit-sharing and capital structure when firms face stochastic revenue shocks. We apply a generalized Nash bargaining solution, which extends the wage bargaining literature by incorporating efficiency wage considerations, profit-sharing and capital structure. The profit-sharing instrument is demonstrated to have positive effort-augmenting and wage-moderating effects, which exactly offset the negative dilution effect in equilibrium. Leverage is shown to decrease employment and to have a strategic commitment value as a wage-moderating effect for firms facing unions in bilateral wage negotiations. Finally, some implications for equilibrium unemployment are characterized.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 275
- Classification
-
Wirtschaft
- Subject
-
Wage bargaining
profit sharing
capital structure
employment
- Event
-
Geistige Schöpfung
- (who)
-
Koskela, Erkki
Stenbacka, Rune
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2000
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Koskela, Erkki
- Stenbacka, Rune
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2000
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