1)There aren’t many recent studies on codetermination (employee directors). Few comments:
2) Effects seem to be context-dependent (e.g. industries) and depend on the level of employee representation. Here are two landmark papers: sciencedirect.com/science/articl… onlinelibrary.wiley.com/doi/abs/10.116…
3) Firms in which there is codetermination respond to adverse shocks by adjusting wages (and other margins) rather than cutting jobs (stylised fact in the worker coops literature). Evidence for Germany (papers.ssrn.com/sol3/papers.cf…) and the Nordics (conference.iza.org/conference_fil…)
4) Then, there is quite big literature on works councils (shop-floor employee representation) offering mixed results. wol.iza.org/articles/do-wo… ftp.iza.org/dp11066.pdf
5) I think this literature is still lagging behind other areas in labour economics in terms of identification. Quasi-experimental studies are rare. Same happened with union studies for a while (except for DiNardo and others). Hopefully, US debates will boost more research.
6) Employee participation is a local public good. Potential productivity gains and distributional effects are hard to separate. Precisely, the kind of context in which you may require public intervention.
7) Historical accounts of the implementation of German codetermination laws indicate employers strongly opposed to them at the beginning. Not sure whether trust is a prerequisite or an outcome of these arrangements.
8) Similar discussions on corporate governance reform here in UK. Here is the Green Paper presented by the government (assets.publishing.service.gov.uk/government/upl…) and a document discussed by a group of scholars at LSE (eprints.lse.ac.uk/88488/7/Estrin…)
