The University of Southampton
University of Southampton Institutional Repository

Labour markets, bargaining and innovation

Labour markets, bargaining and innovation
Labour markets, bargaining and innovation
Much of the recent empirical work on the impact of unions on R&D is based on a theoretical model which predicts that (i) unions have a negative impact on R&D; (ii) under some circumstances an increase in union strength can make both firms and unions worse off. We survey a more recent theoretical literature which takes account of the fact that R&D is often undertaken for strategic reasons by firms that are in competition with one another. We show that in this framework the prevailing theoretical paradigm may be overturned. Thus when firms and unions can enter into long-term bargains then an increase in union strength will increase (decrease) R&D spending if successful innovation causes employment to rise (respectively fall). However, when R&D falls then this increase in union strength can cause both firms and unions to be better off. When firms and unions engage in short-term bargaining then an increase in union bargaining strength will cause R&D to fall when bargaining is over wages alone. However, when bargaining takes place over wages and employment, then, if unions care a lot about employment, the relationship between union strength and R&D is inverse U-shaped.
union bargaining, r&d investment, ex ante bargaining, ex post bargaining
0014-2921
931-939
Ulph, Alistair
82a2f3b8-ac72-4d0e-85cc-2760eb99b117
Ulph, David
966bae3f-b1e6-4e13-9755-36fa740cb88c
Ulph, Alistair
82a2f3b8-ac72-4d0e-85cc-2760eb99b117
Ulph, David
966bae3f-b1e6-4e13-9755-36fa740cb88c

Ulph, Alistair and Ulph, David (1998) Labour markets, bargaining and innovation. European Economic Review, 42 (3-5), 931-939. (doi:10.1016/S0014-2921(97)00147-5).

Record type: Article

Abstract

Much of the recent empirical work on the impact of unions on R&D is based on a theoretical model which predicts that (i) unions have a negative impact on R&D; (ii) under some circumstances an increase in union strength can make both firms and unions worse off. We survey a more recent theoretical literature which takes account of the fact that R&D is often undertaken for strategic reasons by firms that are in competition with one another. We show that in this framework the prevailing theoretical paradigm may be overturned. Thus when firms and unions can enter into long-term bargains then an increase in union strength will increase (decrease) R&D spending if successful innovation causes employment to rise (respectively fall). However, when R&D falls then this increase in union strength can cause both firms and unions to be better off. When firms and unions engage in short-term bargaining then an increase in union bargaining strength will cause R&D to fall when bargaining is over wages alone. However, when bargaining takes place over wages and employment, then, if unions care a lot about employment, the relationship between union strength and R&D is inverse U-shaped.

This record has no associated files available for download.

More information

Published date: 31 May 1998
Keywords: union bargaining, r&d investment, ex ante bargaining, ex post bargaining

Identifiers

Local EPrints ID: 33047
URI: http://eprints.soton.ac.uk/id/eprint/33047
ISSN: 0014-2921
PURE UUID: 0844e4f6-2acd-418a-a2ad-340931679087

Catalogue record

Date deposited: 12 Dec 2007
Last modified: 15 Mar 2024 07:41

Export record

Altmetrics

Contributors

Author: Alistair Ulph
Author: David Ulph

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of http://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×