Union structure and firms incentives for cooperative R&D investments
AbstractThis paper investigates the impact of alternative unionization structures on firms' incentives to spend on cost-reducing R&D activities as well as to form a Research Joint Venture, in the presence of R&D spillovers. We show that, in contrast to the "hold up" argument, if firms invest non-cooperatively and spillovers are low, R&D investments are higher when an industry-wide union sets a uniform wage rate than under firm-level unions. In contrast, investments are always higher under firm-level unions in the case of RJVs. Firms' incentives to form an RJV are non-monotonic in the degree of centralization of the wage-setting, with the incentives being stronger under an industry-wide union if and only if spillovers are low enough. Finally, centralized wage-setting as well as high unemployment benefits may hinder the formation of costly RJVs and their potential welfare benefits.
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Bibliographic InfoPaper provided by University of Crete, Department of Economics in its series Working Papers with number 0705.
Date of creation: 23 Jan 2007
Date of revision:
Unions; Oligopoly; Cost-reducing Innovations; Research Joint Ventures; Spillovers;
Other versions of this item:
- Constantine Manasakis & Emmanuel Petrakis, 2009. "Union structure and firms' incentives for cooperative R&D investments," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 665-693, May.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-28 (All new papers)
- NEP-BEC-2007-01-28 (Business Economics)
- NEP-COM-2007-01-28 (Industrial Competition)
- NEP-INO-2007-01-28 (Innovation)
- NEP-IPR-2007-01-28 (Intellectual Property Rights)
- NEP-LAB-2007-01-28 (Labour Economics)
- NEP-MIC-2007-01-28 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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