The Performance Effects of Collective and Individual Bargaining: A Comprehensive and Granular Analysis of Different Bargaining Systems on Company Productivity

Using representative company level data for all member states of the European Union, we analyze the relationship between different processes and institutional structures of collective bargaining against the development of company labor productivity. Our results clearly show that different processes and institutional structures of collective bargain have very different effects. While show that some processes and structures of collective bargaining ‐ specifically sectorally uncoordinated systems ‐ appear to be detrimental to company performance, the opposite can be said about sectorally coordinated systems. The latter are highly beneficial for economic performance. Thus, what matters are the processes and institutional structures in which collective bargaining is embedded and not the question whether bargaining should be conducted collectively or individually