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Unionisation structure and product innovation

  • Debasmita Basak
  • Arijit Mukherjee

This paper considers the e¤ects of di¤erent labour unionisation structure (viz., decentralised and centralised unions) on product innovation. Although the presence of labour unions reduces the incentive for product innovation compared to the situation with no labour union (or if the unions have no bargaining power in wage determination), the e¤ects of di¤erent labour unionisation structure on innovation are not so straightforward. In the case of symmetric product di¤erentiation, the incentive for innovation is higher under decentralised unions. However, the incentive for innovation can be higher under a centralised union than under decentralised unions in the presence of asymmetric product differentiation. Our paper provides a new perspective to the literature by focusing on product innovation.

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Paper provided by University of Nottingham, School of Economics in its series Discussion Papers with number 11/12.

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Handle: RePEc:not:notecp:11/12
Contact details of provider: Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD
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Web page: http://www.nottingham.ac.uk/economics/

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  1. L. Lambertini & A. Mantovani, 2005. "Process and Product Innovation by a Multiproduct Monopolist: A Dynamic Approach," Working Papers 551, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. Sebastian Braun, 2008. "Economic Integration, Process and Product Innovation, and Relative Skill Demand," Review of International Economics, Wiley Blackwell, vol. 16(5), pages 864-873, November.
  3. Dermot Leahy & Catia Montagna, 1999. "Unionisation and Foreign Direct Investment: Challenging Conventional Wisdom?," Dundee Discussion Papers in Economics 097, Economic Studies, University of Dundee.
  4. Dobson, Paul W., 1994. "Multifirm unions and the incentive to adopt pattern bargaining in oligopoly," European Economic Review, Elsevier, vol. 38(1), pages 87-100, January.
  5. 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.
  6. Mukherjee, Arijit & Pennings, Enrico, 2011. "Unionization structure, licensing and innovation," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 232-241, March.
  7. Justus Haucap & Christian Wey, 2004. "Unionisation Structures and Innovation Incentives," Discussion Papers of DIW Berlin 398, DIW Berlin, German Institute for Economic Research.
  8. L. Lambertini & A. Mantovani, 2004. "Process and Product Innovation: a Differential Game Approach to Product Life Cycle," Working Papers 529, Dipartimento Scienze Economiche, Universita' di Bologna.
  9. Menezes-Filho, Naercio & Van Reenen, John, 2003. "Unions and Innovation: A Survey of the Theory and Empirical Evidence," CEPR Discussion Papers 3792, C.E.P.R. Discussion Papers.
  10. Mukherjee, A. & Pennings, E., 2000. "Imitation, patent protection and welfare," Working Papers 00.03, Eindhoven Center for Innovation Studies.
  11. Andrea Bassanini & Ekkehard Ernst, 2002. "Labour Market Institutions, Product Market Regulation, and Innovation: Cross-Country Evidence," OECD Economics Department Working Papers 316, OECD Publishing.
  12. Dhillon, Amrita & Petrakis, Emmanuel, 2002. "A generalised wage rigidity result," International Journal of Industrial Organization, Elsevier, vol. 20(3), pages 285-311, March.
  13. Lin, Ping & Saggi, Kamal, 2002. "Product differentiation, process R&D, and the nature of market competition," European Economic Review, Elsevier, vol. 46(1), pages 201-211, January.
  14. Rosenkranz, Stephanie, 2003. "Simultaneous choice of process and product innovation when consumers have a preference for product variety," Journal of Economic Behavior & Organization, Elsevier, vol. 50(2), pages 183-201, February.
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