Rhineland exit?

A.L. Bovenberg, C.N. Teulings

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We argue in favour of the shareholder model of the firm because assigning the full surplus of the firm to shareholders provides the best possible social insurance by diversifying firmspecific risks on capital markets. Coordination in wage bargaining and collective norms on what is proper compensation play an important role in reducing the claim of workers on the firm’s surplus. In Denmark, workers bear less firm-specific risk than workers in the United States do. Collective action thus has an important role to play. Politicians, however, face the temptation to please voters and incumbent workers with short-run gains at the expense of exposing workers to firm-specific risks and reducing future job creation.
Original languageEnglish
Pages (from-to)710-726
JournalInternational Tax and Public Finance
Volume16
Issue number5
Publication statusPublished - 2009

Fingerprint

Workers
Exit
Surplus
Shareholders
Politicians
Temptation
Capital markets
Denmark
Expenses
Social insurance
Incumbents
Job creation
Short-run
Wage bargaining
Voters
Collective action

Cite this

Bovenberg, A. L., & Teulings, C. N. (2009). Rhineland exit? International Tax and Public Finance, 16(5), 710-726.
Bovenberg, A.L. ; Teulings, C.N. / Rhineland exit?. In: International Tax and Public Finance. 2009 ; Vol. 16, No. 5. pp. 710-726.
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Bovenberg, AL & Teulings, CN 2009, 'Rhineland exit?', International Tax and Public Finance, vol. 16, no. 5, pp. 710-726.

Rhineland exit? / Bovenberg, A.L.; Teulings, C.N.

In: International Tax and Public Finance, Vol. 16, No. 5, 2009, p. 710-726.

Research output: Contribution to journalArticleScientificpeer-review

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