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Firms' financial obligations affect labor negotiation dynamics, pressuring firms and workers to reach an agreement and … avoid costly walkouts. Using data on negotiation events, union elections, and policy changes, we find that firms' debt … maturity: (i) increases when approaching negotiations and in response to greater bargaining power held by workers; and (ii) is …
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Recently, Blanchard and Kremer (BK) argued that disorganization has led to the output decline in the former Soviet Union. In this paper we introduce liquidity and credit constraints into the BK model and show how these problems can alleviate the hold-up problem. We argue further that barter...
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