THE DETERMINATION OF RESEARCH-AND-DEVELOPMENT - EMPIRICAL-EVIDENCE ONTHE ROLE OF UNIONS

This paper examines the empirical evidence of the role of union bargai ning on innovation. We review the existing empirical evidence and emph asis some of the problems with the theoretical assumptions. We outline a simple model of strategic R&D with union bargaining and compare its predictions with econometric results from U.K. enterprise data. Union power (as proxied by density) has at first a positive effect on a fir m's relative R&D performance. The effects of union power are only nega tive when the (a) union density is very high; (b) the union bargains o nly over wages. (C) 1998 Published by Elsevier Science B.V. All rights reserved.