Union bargaining power, subcontracting and innovation

Beladi, Hamid and Mukherjee, Arijit (2017) Union bargaining power, subcontracting and innovation. Journal of Economic Behavior and Organization, 137 . pp. 90-104. ISSN 0167-2681

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Abstract

We show that if a firm can subcontract production to an informal sector, an increase in union power may either increase or decrease innovation. An increase in union power makes the firm worse off irrespective of its effect on innovation. However, in contrast to the usual belief, an increase in union power may increase consumer surplus and decrease union utility by affecting innovation, thus suggesting that a union may not want to be too powerful. An increase in union power may create an ambiguous effect on social welfare. Our analysis provides new insights to the relation between union power and innovation.

Item Type: Article
Keywords: Consumer surplus; Innovation; Union; Subcontracting
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > Nottingham University Business School
Identification Number: 10.1016/j.jebo.2017.02.013
Depositing User: Howis, Jennifer
Date Deposited: 22 Feb 2017 14:45
Last Modified: 12 Oct 2017 22:20
URI: http://eprints.nottingham.ac.uk/id/eprint/40707

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