Pacts for employment and competitiveness are an integral component of the ongoing process of decentralization of collective bargaining in Germany, a phenomenon that has been hailed as key to that nation's economic resurgence. Yet little is known about the effects of pacts on firm performance....

This article examines the relationship between works councils and the closure of manufacturing establishments in Germany. The relationship varies according to circumstances and type of establishment. For the subsample of single-establishment firms, the estimates show that works council presence...