Union structure and firms' incentives for cooperative R&D investments
AbstractWe investigate the impact of alternative unionization structures on firms' incentives to invest on cost-reducing R&D and to form Research Joint Ventures (RJVs), in the presence of R&D spillovers. We show that if firms invest non-cooperatively and spillovers are low, R&D investments are higher under centralized rather than under decentralized wage-setting. In contrast, investments are always higher under decentralized wage-setting in the case of RJVs. Firms' incentives to form an RJV are stronger under centralized wage-setting if and only if spillovers are low enough. Finally, centralized wage-setting may hinder the formation of costly RJVs and their potential welfare benefits.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 42 (2009)
Issue (Month): 2 (May)
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Other versions of this item:
- Constantine Manasakis & Emmanuel Petrakis, 2007. "Union structure and firms incentives for cooperative R&D investments," Working Papers 0705, University of Crete, Department of Economics.
- Constantine Manasakis & Emmanuel Petrakis, 2004. "Union structure and firms incentives for cooperative R&D investments," Working Papers 0508, University of Crete, Department of Economics.
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
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