Hirsch, Boris; Merkl, Christian; Müller, Steffen; … - Institute for the Study of Labor (IZA) - 2014
. Second, the larger a firm's scale elasticity, the higher its incentive to choose centralized rather than decentralized wage … setting due to labor cost and straitjacket effects. As firms in Germany are allowed to choose their wage formation regime, we … test these two hypotheses with representative establishment data for West Germany. We find that establishments with …