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Union structure and firms' incentives for cooperative R&D investments

Constantine Manasakis and Emmanuel Petrakis ()

Canadian Journal of Economics/Revue canadienne d'économique, 2009, vol. 42, issue 2, 665-693

Abstract: Abstract We investigate the impact of alternative unionization structures on firms' incentives to invest on cost‐reducing R&D and to form Research Joint Ventures (RJVs), in the presence of R&D spillovers. We show that if firms invest non‐cooperatively and spillovers are low, R&D investments are higher under centralized rather than under decentralized wage‐setting. In contrast, investments are always higher under decentralized wage‐setting in the case of RJVs. Firms' incentives to form an RJV are stronger under centralized wage‐setting if and only if spillovers are low enough. Finally, centralized wage‐setting may hinder the formation of costly RJVs and their potential welfare benefits. On examine l'impact des structures syndicales sur les incitations des firmes à investir dans la R&D pour réduire ses coûts, et à former des partenariats de recherche (PDR) quand la R&D a des effets externes de débordement. On montre que si les firmes investissent de manière non‐coopérative, et que les débordements sont faibles, les investissements en R&D sont plus élevés quand le processus de détermination des salaires est centralisé plutôt que décentralisé. A contrario, les investissements sont plus élevés quand le processus de détermination des salaires est décentralisé, si les PDR existent. Les incitations des firmes à former des partenariats sont plus fortes quand le processus de détermination des salaires est centralisé si et seulement si les débordements sont assez bas. Finalement le processus de détermination des salaires centralisé peut nuire à la formation de partenariats coûteux et à la réalisation de bénéfices de bien‐être potentiel.

Date: 2009
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https://doi.org/10.1111/j.1540-5982.2009.01523.x

Related works:
Journal Article: Union structure and firms' incentives for cooperative R&D investments (2009) Downloads
Working Paper: Union Structure and Firms Incentives for Cooperative R&D Investments (2007) Downloads
Working Paper: Union structure and firms incentives for cooperative R&D investments (2004) Downloads
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