Publication detail

Mechanisms of the State Dependence of Wage Setting: Evidence from a Survey of Czech Firms

Author(s): Mgr. Diana Žigraiová , Jan Babecký, Kamil Galuščák
Type: Articles in journals with impact factor
Year: 2017
Number: 0
ISSN / ISBN:
Published in: Eastern European Economics, vol. 55, pp. 342-356
Publishing place:
Keywords: State dependence, survey data, wage setting
JEL codes: C83, J31, J41, L11
Suggested Citation:
Abstract: Drawing on firms’ reactions to the changing macroeconomic conditions prior to and after the global financial crisis of 2008–09, this article presents evidence for the state dependence of wage setting. Further, the article investigates the underlying mechanisms of state dependence by distinguishing between firms’ general characteristics and financial performance and the environment in which firms operate. The results, based on a survey of Czech firms, show that the frequency of wage adjustment is higher for large firms, foreign-owned firms, firms covered by collective agreements, firms in good financial condition, and firms facing positive shocks, while negative demand shocks and strong competition reduce the frequency of wage adjustment.

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