The number of start-ups in Germany has been at a historically low level for a decade. While there was an annual average of 240,000 new start-ups between 1995 and 2004, the number has fallen significantly in the following years to around 165,000. One explanation is demographic change, but another...

Theory suggests that firms confront a hold-up problem in dealing with workplace unionism: unions will appropriate a portion of the quasi-rents stemming from long-lived capital. As a result, firms may be expected to limit their exposure to rent-seeking by reducing investments. The U.S. evidence...