Empirical studies find that firms with employee representation have a higher productivity than firms without employee representation. The exact mechanisms for this consistent finding remain unclear, however. A frequent theoretical argument postulates that employee representation provides a...

This paper studies how different unionisation structures affect firm productivity, firm performance, and consumer welfare in a monopolistic competition model with heterogeneous firms and free entry. While centralised bargaining induces tougher selection among hetero- geneous producers and thus...