Employee trust in management and mutual gains hypothesis in Japanese firms

•Employee trust in management positively relates to productivity enhancing efforts.•Employee trust in management positively relates to employees’ sense of job security.•The findings of this study clearly support the mutual gains hypothesis.•Management disclose high-quality information to develop employee trust in themselves.•Unions play a role in mitigating information asymmetry between labor and management. This study analyzes whether employee trust in management results in mutual gains for employers and employees in the Japanese automobile industry. The results suggest that employees’ productivity-enhancing efforts and sense of job security are both positively related to their trust in management. The findings clearly support the mutual gains hypothesis. The results also indicate that in fostering employee trust, management plays a supportive role in enabling unions to verify its claims by disclosing high-quality information, whereas unions play an important role in mitigating information asymmetry.