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R&D investment and import competition in unionized industries

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  • Usha Nair-Reichert

Abstract

This paper investigates the effect of unionization on the flow of research and development (R&D) investment and import competition in US manufacturing industries. If the unions adopt a myopic strategy, they may attempt to maximize current rents, even if it reduces strategic R&D necessary to compete against imports. However, if unions are employment oriented and realize that R&D is essential to compete effectively against imports and reduce job losses for their members, they may favour a more co-operative strategy. This issue is empirically investigated at the industry level using data from 1975-1984. One of the main contributions of this study is the attempt to distinguish between strategic and non-strategic R&D. The results of this analysis indicate that depending on the extent of unionization, there is a significant amount of variation in the magnitude and direction of the impact of strategic R&D on import penetration. Supporting evidence also indicates that the union rent-seeking behaviour related to strategic R&D investments varies between import and export-competing industries.

Suggested Citation

  • Usha Nair-Reichert, 2001. "R&D investment and import competition in unionized industries," Applied Economics Letters, Taylor & Francis Journals, vol. 8(10), pages 669-674.
    • Handle: RePEc:taf:apeclt:v:8:y:2001:i:10:p:669-674
    DOI: 10.1080/13504850110036733
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    References listed on IDEAS

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    1. Bronwyn H. Hall, 1990. "The Manufacturing Sector Master File: 1959-1987," NBER Working Papers 3366, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Marco Guerrazzi, 2020. "Wage and employment determination in a dynamic insider–outsider model," Evolutionary and Institutional Economics Review, Springer, vol. 17(1), pages 1-23, January.

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