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Profit Sharing and Productivity: Further Evidence from the Chemicals Industry
Author(s) -
SHEPARD EDWARD M.
Publication year - 1994
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/j.1468-232x.1994.tb00351.x
Subject(s) - profit sharing , profit (economics) , incentive , productivity , industrial organization , microeconomics , economics , gross profit , business , macroeconomics , finance
Profit sharing potentially augments productivity by affecting motivational variables that promote group norms favoring effort. A factor augmentation model of production is developed to measure the impact of profit sharing on productivity using a test industry in U.S. manufacturing. The model is applied using alternative exogenous and endogenous specifications for the profit‐sharing incentive variable. The results are consistent with those obtained in other recent studies and suggest that profit sharing results in improvements in productivity.