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Unions’ and Firms’ Attitudes Towards Research Joint Ventures: When Will the Incentives Be Aligned?

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  • Constantine Manasakis
  • Vasileios Zikos

Abstract

. This paper studies the relationship between unionization and innovation activity. Under a unionized labour market, we find that when R&D spillovers are relatively low (high), cooperative, as well as non‐cooperative R&D is a strategic substitute (complement). Furthermore, irrespective of the spillover rate, cooperation increases firms’ profits, whereas it increases union utility only if spillovers are sufficiently high. Alignment of incentives between firms and unions requires that firms pay transfers in the form of ‘rent‐sharing’ to make a Research Joint Venture attractive to unions. Our results suggest that if spillovers are low enough, the amount of money that firms give up in order to buy unions’ acquiescence weakens their incentives to form a Research Joint Venture.

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  • Constantine Manasakis & Vasileios Zikos, 2007. "Unions’ and Firms’ Attitudes Towards Research Joint Ventures: When Will the Incentives Be Aligned?," LABOUR, CEIS, vol. 21(1), pages 135-156, March.
    • Handle: RePEc:bla:labour:v:21:y:2007:i:1:p:135-156
    DOI: 10.1111/j.1467-9914.2006.00362.x
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    References listed on IDEAS

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    1. Van Reenen, John & Menezes-Filho, Naercio, 2003. "Unions and Innovation: A Survey of the Theory and Empirical Evidence," CEPR Discussion Papers 3792, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Vasileios Zikos, 2007. "The Temporal Dimension of Wage Contracts in Oligopoly with Spillovers," Discussion Paper Series 2007_04, Department of Economics, Loughborough University, revised Feb 2007.
    2. Jack Kleinhenz & Russ Smith, 2011. "Regional Competitiveness: Labor-Management Relations, Workplace Practices, and Workforce Quality," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 46(2), pages 111-124, April.

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