Abstract
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.
Original language | English |
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Journal | Industrial Relations |
Volume | 58 |
Issue number | 3 |
Pages (from-to) | 376-422 |
Number of pages | 47 |
ISSN | 0019-8676 |
DOIs | |
Publication status | Published - Jul 2019 |