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Unions and firm innovation in China: Synergy or strife?

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  • Fang, Tony
  • Ge, Ying

Abstract

The ‘monopoly face’ of unions suggests that the rent-seeking activities of unions discourage research and development investment and that the collective bargaining rules may restrict management flexibility, thus deterring innovations. On the other hand, the arrival of unions in the workplace may ‘shock’ the management into adopting more systematic rather than ad hoc management practices and that such innovative workplace practices may enhance an organization's ability to introduce new products and/or new processes. Further, the ‘voice face’ of unions argues that the independent ‘questioning’ of the management deliberations by the unions can also lead to better, more creative and, hence, more productive solutions. This paper investigates the link between unions and firm innovations in China. Different from their counterparts in advanced economies, Chinese unions are found to encourage firm innovations and R&D investment.

Suggested Citation

  • Fang, Tony & Ge, Ying, 2012. "Unions and firm innovation in China: Synergy or strife?," China Economic Review, Elsevier, vol. 23(1), pages 170-180.
  • Handle: RePEc:eee:chieco:v:23:y:2012:i:1:p:170-180
    DOI: 10.1016/j.chieco.2011.09.001
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    References listed on IDEAS

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    Cited by:

    1. Dong, Zhiqiang & Luo, Zijun & Wei, Xiahai, 2016. "Social insurance with Chinese characteristics: The role of communist party in private firms," China Economic Review, Elsevier, vol. 37(C), pages 40-51.
    2. Fang, Tony & Ge, Ying, 2013. "Chinese Unions and Enterprises Performance," IZA Discussion Papers 7870, Institute for the Study of Labor (IZA).
    3. Vinod Mishra & Russell Smyth, 2014. "Technological Change and Wages in China: Evidence from Matched Employer–Employee Data," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 123-138, February.
    4. Balsmeier, Benjamin, 2017. "Unions, collective relations laws and R&D investment in emerging and developing countries," Research Policy, Elsevier, vol. 46(1), pages 292-304.
    5. Antonioli, Davide & Mazzanti, Massimiliano, 2017. "Towards a green economy through innovations: The role of trade union involvement," Ecological Economics, Elsevier, vol. 131(C), pages 286-299.
    6. Qiao, Peng-hua & Ju, Xiao-feng & Fung, Hung-Gay, 2014. "Industry association networks, innovations, and firm performance in Chinese small and medium-sized enterprises," China Economic Review, Elsevier, vol. 29(C), pages 213-228.

    More about this item

    Keywords

    Unions; Innovation; China;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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