German works councils provide a highly developed mechanism for codetermination designed to increase trust and cooperation within firms. This study examines whether or not the functioning of works councils depends on the type of ownership. Comparing domestic- and foreign-owned firms in Germany, the article finds that works councils and managers in foreign-owned firms are less likely to cooperate. The finding fits the notion that the activities of foreign multinational companies can involve tensions with the institutional framework of the host country.
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