Arijit Mukherjee () (University of Nottingham and The Leverhulme Centre for Research in Globalisation and Economic Policy, UK) Enrico Pennings () (Faculty of Economics, Erasmus Universiteit Rotterdam, the Netherlands)
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Taking technological differences between firms as given, we show that the technologically advanced firm has a stronger incentive for technology licensing under a decentralized unionization structure than with centralized wage setting. Furthermore, We show that, in presence of licensing, the incentive for innovation may also be stronger under decentralized unions. Unions have a clear preference for centralization only if productivity improvements are relatively small.
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