The relationship between unionization, productivity and firm efficiency: Evidence on the chemical industry in Turkey

The purpose of this dissertation is to review the effects of unionization on productivity in the Turkish Chemical sector. The data proceed from the firms listed in the first and second five hundred firms in the review conducted by ICI (Istanbul Chamber of Industry) between 1998-2006. Both parametric and nonparametric research methods were used in the study. ANOVA analysis as a parametric method was employed in two different ways. First, by including the totality of the chemical sector firms considered, the degrees of productivity of the firms and factors that may affect the productivity were investigated in terms of unionization status (union, non-union and ?nonbinding collective agreement? groups). Then, after the firms were arranged within subgroups (general chemicals, pharmaceuticals, oil and plastics), ANOVA analysis was applied again to investigate the differences between the effects of unionization on corporate productivity with regard to these subgroups. In the second parametric method, panel regression analysis was applied to unionized firms, by employing a modified Cobb-Douglas production function. Then, by means of Data Envelopment Analysis, another non-parametric research method, the relative productivity scores in union and non-union firms were computed for each year in the 1998-2006. This method enabled productivity comparisons between union and non-union firms on an annual basis. Later, another nonparametric method, Malmquist Productivity analysis was applied using the panel data set between 1998-2006 period. Malmquist Productivity Index, made it possible to determine the productivity shift in union and non-union firms within the 9 year period in a comparative manner. Finally, in-depth interviews were conducted with a number of firms as well as with labor and employer unions in order to highlight the results.İn conclusion, nonunion firms were found more productive compared to the union and ?nonbinding agrrement firms?. Besides, it was detected that increase in union density in union firms has a productivity raising effect.