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Wage-Setting Institutions and R&D Collaboration Networks

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  • Ben Ferrett

    ()
    (School of Business and Economics, Loughborough University, UK)

  • Vasileios Zikos

    ()
    (University of Surrey, Guildford, UK)

Abstract

We analyse how union structures that differ in the degree of wage-setting centralization affect the pattern of R&D network formation. Within the context of a three-firm industry, a central union that sets a uniform wage is shown to induce a partial R&D network that includes two firms but excludes the third. In contrast, we find that, under less centralized union structures, firms have incentives to form R&D networks with a larger number of alliances. This result is consistent with the stylised facts for industrialised countries: recent decades have seen an upsurge in R&D alliances along with labour market deregulation towards more flexible wage-setting institutions.

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Bibliographic Info

Paper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number 2012_02.

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Date of creation: Apr 2012
Date of revision: Apr 2012
Handle: RePEc:lbo:lbowps:2012_02

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Keywords: Networks; R&D collaboration; unionisation structures.;

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  1. Deroian, Frederic & Gannon, Frederic, 2006. "Quality-improving alliances in differentiated oligopoly," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 629-637, May.
  2. Justus Haucap & Christian Wey, 2004. "Unionisation Structures and Innovation Incentives," Discussion Papers of DIW Berlin 398, DIW Berlin, German Institute for Economic Research.
  3. Narula,Rajneesh & Hagedoorn,John, 1998. "Innovating through strategic alliances: moving towards international partnerships and contractual agreements," Research Memorandum 025, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  4. Calabuig, Vicente & Gonzalez-Maestre, Miguel, 2002. "Union structure and incentives for innovation," European Journal of Political Economy, Elsevier, vol. 18(1), pages 177-192, March.
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