Wage-setting institutions and corporate governance

Corporate governance differs across countries. * Wage-setting institutions are a possible contributor. * Investor protection is related to wage-bargaining centralization. * This relationship is nonmonotonic. * The model can explain a puzzle involving Scandinavian countries. Display Omitted We present a model in which wage-setting structures explain cross-country variation in corporate governance. The model predicts a nonmonotonic relationship between the level of centralization in wage-bargaining institutions and the levels of firm ownership concentration and investor protection legislation. L... Mehr ...