{"insight":{"id":"121525392","lede":"Labor efficiency is measured using a net hiring optimum for a sample of German firms between 1995 - 2015. Parity codetermination was found to reduce the deviation from the net hiring optimum.","slug":"german-firms-moving-from-zero-or-1-3rd-parity-to-1-2-parity-codetermination-incre","title":"German firms moving from zero or 1/3rd parity to 1/2 parity codetermination increase their labor investment efficiency.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745","lede":"

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

In economic contexts, there are two main types of efficiency: microeconomic efficiency (where system efficiency is understood as maximizing a particular output given available inputs), and the efficient-market hypothesis (a state where asset prices reflect all available information).

\n","ledeExcerpt":"In general, efficiency refers to maximizing outputs while minimizing inputs. \n\nIn economic contexts, there are two main types of efficiency: microeconomic efficiency (where system efficiency is understood as maximizing a particular output given available inputs), and the efficient-market hypothesis (a state where asset prices reflect all available information).","featured":true},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Amidst debates over the merits of continued growth, we begin with the idea that all else equal, a society with growth, with more wealth, is preferable to one with less. Without growth, society becomes a zero-sum distributional game: anyone's gain is another's loss. Growth (all else equal) enables shared prosperity.

\n\n

But there is broad agreement that current measures of growth, such as GDP, are inadequate to the task of providing a suitable proxy to guide further growth. Whether devising improved measures that account for missing elements such as sustainability, equity, leisure time, or digital value, or constructing altogether new proxies (OECD's Better Life Index, for example), the conversation about how best to measure, and thus drive, equitable, regenerative, socially desirable growth is a rich field of debate.

\n","ledeExcerpt":"We define growth as the expansion of wealth in society; growth is about generating a \"a bigger pie\".\n\nAmidst debates over the merits of continued growth, we begin with the idea that *all else equal*, a society with growth, with more wealth, is preferable to one with less. Without growth, society becomes a zero-sum distributional game: anyone's gain is another's loss. Growth (all else equal) enables shared prosperity.\n\nBut there is broad agreement that current measures of growth, such as GDP, are inadequate to the task of providing a suitable proxy to guide further growth. Whether devising revised measures, such as Tyler Cowen's notion of wealth plus\" (GDP, plus measures of leisure time, household production, and environmental considerations), or constructing altogether new proxies (OECD's 'Better Life Index), the conversation about how best to measure, and thus drive, equitable, regenerative, socially desirable growth is a rich field of debate.","featured":true}],"sources":[{"id":"121525385","lede":"\"This study examines whether parity codetermination at German supervisory boards improves labor investment efficiency at firm level. We focus on labor, as it is an important production factor. Labor investment decisions are not easily reversible in the short term, given that hiring and firing costs are usually quite high due to labor regulation in Germany. As labor representatives are legally entitled to 50% voting rights at the supervisory board level (parity codetermination), we expect them to contribute insider knowledge to the supervisory board. As they have access to internal documents, we also expect them to reduce information asymmetry and potential agency conflicts between management on the one hand and outsiders such as investors or capital suppliers on the other. Both smaller information asymmetries and reduced agency conflicts, in turn, ought to increase a firm’s labor investment efficiency. Labor investment proxies for deviations from a firm’s optimal level of investment in labor in the form of over- and underinvestment, defined as hiring fewer employees than required to run profitable projects (underhiring) or retaining employees who are occupied with non-profitable projects (overhiring). We measure labor investment efficiency using such a net hiring optimum for a sample of German listed firms between 1995 and 2015. The results indicate that parity codetermination causes a lower deviation from the net hiring optimum. Our results are interesting for various stakeholders, especially for policymakers, managers, shareholders and employees who may not be aware of the importance of codetermination for firm efficiency, as well as for firms that are considering circumventing German legislation.\"","link":"https://link.springer.com/article/10.1007/s11573-019-00930-9","slug":"parity-codetermination-at-the-board-level-and-labor-investment-efficiency","kind":"Academic Paper","title":"Parity Codetermination at the Board Level and Labor Investment Efficiency","year":"2020-01-01","researchers":[{"id":"121525380","location":"Chair of Accounting, Auditing and Sustainability, University of Hamburg","name":"Kerstin Lopatta","seoDescription":"","slug":"kerstin-lopatta"},{"id":"121525381","location":"Chair of Accounting and Corporate Governance, Carl von Ossietzky University Oldenburg","name":"Katarina Böttcher","seoDescription":"","slug":"katarina-bottcher"},{"id":"121525382","location":"Centre for Sustainability Governance, University of South Australia (UniSA) Business School","name":"Sumit K. Lodhia","seoDescription":"","slug":"sumit-k-lodhia"},{"id":"121525384","location":"Chair of Accounting, Auditing and Sustainability, University of Hamburg","name":"Sebastian A. Tideman","seoDescription":"","slug":"sebastian-a-tideman"}]}]}}