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Wage-Setting Institutions and R&D Collaboration Networks


  • Ben Ferrett

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

  • Vasileios Zikos

    () (University of Surrey, Guildford, UK)


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.

Suggested Citation

  • Ben Ferrett & Vasileios Zikos, 2012. "Wage-Setting Institutions and R&D Collaboration Networks," Discussion Paper Series 2012_02, Department of Economics, Loughborough University, revised Apr 2012.
  • Handle: RePEc:lbo:lbowps:2012_02

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    References listed on IDEAS

    1. Justus Haucap & Christian Wey, 2004. "Unionisation structures and innovation incentives," Economic Journal, Royal Economic Society, vol. 114(494), pages 149-165, March.
    2. Deroian, Frederic & Gannon, Frederic, 2006. "Quality-improving alliances in differentiated oligopoly," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 629-637, May.
    3. 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.
    4. John Hagedoorn & Rajneesh Narula, "undated". "Innovating through strategic alliances: moving towards international partnerships and contractual agreements," STEP Report series 199805, The STEP Group, Studies in technology, innovation and economic policy.
    5. Narula, Rajneesh & Duysters, Geert, 2004. "Globalisation and trends in international R&D alliances," Journal of International Management, Elsevier, vol. 10(2), pages 199-218.
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    Cited by:

    1. Tran, Tat Thanh & Zikos, Vasileios, 2017. "R&D networks among suppliers and manufacturers," Economic Modelling, Elsevier, vol. 60(C), pages 151-161.

    More about this item


    Networks; R&D collaboration; unionisation structures.;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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