Just a question of selection?

Abstract

"Using German firm panel data, we analyze the productivity effects of profit sharing. Because selectivity should pose a severe problem in this context, we combine matching with a difference-in-differences approach. This method enables us to rule out potential bias. Our results suggest that selectivity does indeed matter. Firms with very special characteristics apply profit sharing. We find that these establishments are already more productive before they decide to implement profit sharing. Nevertheless, after accounting for selection, our results show that the introduction of profit sharing leads to a significantly higher productivity in these firms." (Author's abstract, Published by arrangement with John Wiley & Sons) ((en))

Cite article

Kraft, K. & Lang, J. (2016): Just a question of selection? The causal effect of profit sharing on a firm's performance. In: Industrial relations, Vol. 55, No. 3, p. 444-467. DOI:10.1111/irel.12145