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R&D and Unionism: Comparative Evidence from British Companies and Establishments

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  • Naercio Menezes-Filho
  • David Ulph
  • John Van Reenen

Abstract

U.S. research has found that unionization adversely affects research and development investment, consistent with the view that labor unions' rent-seeking activities act as a tax on innovation. In this U.K. study, preliminary analysis of two datasets (a cross-section of plants and a company panel for the years 1983–90) shows the same negative correlation. This correlation completely disappears, however, when controls are included for such factors as cohort effects and the availability of innovative technology in the industry. Moreover, R&D intensity appears to have been higher in enterprises where there were low levels of union density than in those where there was no union presence. Some evidence suggests that the difference between U.K and U.S. results may be due to cross-country differences in the prioritization of non-pay issues in bargaining.

Suggested Citation

  • Naercio Menezes-Filho & David Ulph & John Van Reenen, 1998. "R&D and Unionism: Comparative Evidence from British Companies and Establishments," ILR Review, Cornell University, ILR School, vol. 52(1), pages 45-63, October.
    • Handle: RePEc:sae:ilrrev:v:52:y:1998:i:1:p:45-63
    DOI: 10.1177/001979399805200103
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    References listed on IDEAS

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    Cited by:

    1. Tapio Palokangas, 2008. "Economic Integration, Lobbying by Firms and Workers, and Technological Change," DEGIT Conference Papers c013_003, DEGIT, Dynamics, Economic Growth, and International Trade.
    2. Fathi Fakhfakh & Virginie Pérotin & Andrew Robinson, 2011. "Workplace Change and Productivity: Does Employee Voice Make a Difference?," Chapters, in: Susan Hayter (ed.), The Role of Collective Bargaining in the Global Economy, chapter 5, Edward Elgar Publishing.
    3. Cetrulo, Armanda & Cirillo, Valeria & Landini, Fabio, 2022. "Organized Labour and R&D: Evidence from Italy," GLO Discussion Paper Series 1195, Global Labor Organization (GLO).
    4. Dongphil Chun & Yanghon Chung & Chungwon Woo & Hangyeol Seo & Hyesoo Ko, 2015. "Labor Union Effects on Innovation and Commercialization Productivity: An Integrated Propensity Score Matching and Two-Stage Data Envelopment Analysis," Sustainability, MDPI, vol. 7(5), pages 1-19, April.
    5. Hristos Doucouliagos & Patrice Laroche, 2013. "Unions and Innovation: New Insights From the Cross-Country Evidence," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(2), pages 467-491, April.
    6. Giovanni Sulis & Gabriele Cardullo, 2023. "Unions and investment in intangible capital," IZA World of Labor, Institute of Labor Economics (IZA), pages 201-201, May.
    7. Stephen Bond & Dietmar Harhoff & John Van Reenen, 2010. "Investment, R&D and Financial Constraints in Britain and Germany," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 433-460, National Bureau of Economic Research, Inc.
    8. John T. Addison, 2005. "The Determinants Of Firm Performance: Unions, Works Councils, And Employee Involvement/High‐Performance Work Practices," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(3), pages 406-450, July.
    9. John T. Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2017. "Collective Bargaining and Innovation in Germany: A Case of Cooperative Industrial Relations?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(1), pages 73-121, January.
    10. Naercio Menezes-Filho & Helio Zylberstajn & Jose Paulo Chahad & Elaine Pazello, 2002. "Unions and the Economic Performanceof Brazilian Establishments," Research Department Publications 3157, Inter-American Development Bank, Research Department.
    11. Addison, John T. & Heywood, John S. & Wei, Xiangdong, 2001. "Unions and Plant Closings in Britain: New Evidence from the 1990/98 WERS," IZA Discussion Papers 352, Institute of Labor Economics (IZA).
    12. Palokangas, Tapio K., 2005. "Economic Integration, Market Power and Technological Change," IZA Discussion Papers 1592, Institute of Labor Economics (IZA).
    13. Davide Antonioli & Massimiliano Mazzanti, 2009. "Techno-organisational strategies, environmental innovations and economic performances. Micro-evidence from an SME-based industrial district," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 145-168.
    14. Dumont, Michel & Rayp, Glenn & Willemé, Peter, 2012. "The bargaining position of low-skilled and high-skilled workers in a globalising world," Labour Economics, Elsevier, vol. 19(3), pages 312-319.
    15. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Bellmann, Lutz, 2013. "Collective Bargaining and Innovation in Germany: Cooperative Industrial Relations?," IZA Discussion Papers 7871, Institute of Labor Economics (IZA).
    16. John Van Reenen, 2001. "The new economy: reality and policy," Fiscal Studies, Institute for Fiscal Studies, vol. 22(3), pages 307-336, September.
    17. Guendalina Anzolin & Chiara Benassi & Armanda Cetrulo, 2024. "Industrial relations and firm-level innovation. A comparative analysis of establishment data in Germany and Italy," LEM Papers Series 2024/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    18. M. Dumont & G. Rayp & P. Willem, 2010. ""M nage trois" in a globalizing world: bargaining between firms, low-skilled and high-skilled workers," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 10/687, Ghent University, Faculty of Economics and Business Administration.
    19. Cetrulo, Armanda & Cirillo, Valeria & Landini, Fabio, 2025. "Labour, unions and R&D in Italian firms," Structural Change and Economic Dynamics, Elsevier, vol. 73(C), pages 262-281.
    20. Laroche, Patrice, 2020. "Unions, Collective Bargaining and Firm Performance," GLO Discussion Paper Series 728, Global Labor Organization (GLO).
    21. Ilhang Shin & Sorah Park & Seong Pyo Cho & Seungho Choi, 2020. "The effect of labor unions on innovation and market valuation in business group affiliations: new evidence from South Korea," Asian Business & Management, Palgrave Macmillan, vol. 19(2), pages 239-270, April.
    22. Adam Seth Litwin, 2017. "Collective Bargaining and Technological Investment: The Case of Nurses’ Unions and the Transition from Paper-Based to Electronic Health Records," British Journal of Industrial Relations, London School of Economics, vol. 55(4), pages 802-830, December.

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