Organizational Trust, Fear of Job Loss, and TFP Growth: A Sectoral Analysis for the EU

Abstract

Analyzing the sectoral variance in growth rates of total factor productivity in a European country sample from 1996 to 2006, this contribution detects no significant relationship between organizational trust and TFP growth. Yet, the relationship between fear of job loss and TFP growth seems to be significantly associated, in an inverted U-shaped relationship. This relationship proves to be robust to a range of alterations. The analysis concludes that depending on the specific sector, to enhance productivity it might be beneficial to liberalize or regulate employment relations. When analyzing the non-farm market sectors C-K, the relationship takes the form of a significant, negative linear relationship.