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Title: Unionization structure, licensing and innovation
Authors: Mukherjee, Arijit
Pennings, Enrico
Keywords: Centralized union
Decentralized union
Innovation
Licensing
Union utility
Issue Date: 2011
Publisher: © Elsevier B.V.
Citation: MUKHERJEE, A. and PENNINGS, E., 2011. Unionization structure, licensing and innovation. International Journal of Industrial Organization, 29 (2), pp. 232 - 241.
Abstract: We show the effects of the unionization structure (viz., decentralized and centralized unions) on a firm's incentive for technology licensing and innovation. The incentive for technology licensing is stronger under decentralized unions. We identify circumstances under which the benefit from licensing creates a stronger incentive for innovation under decentralized unions. If the union's preference for employment is high, the benefit from licensing may create higher incentive for innovation under decentralized unions. However, if the union's preference for wage is high enough, the incentive for innovation is higher under a centralized union irrespective of licensing ex-post innovation. If the centralized union decides whether or not to supply workers to all firms, the possibility of higher innovation under decentralized unions increases. We further show that perfectly substitutable workers can be better off under decentralized unions if the labor productivity depends on the unionization structure, which occurs in our analysis when, e.g., licensing after innovation occurs only under decentralized unions or innovation (with no licensing) occurs only under a centralized union.
Description: Closed access. This article was published in the International Journal of Industrial Organization and the definitive version is available at: http://dx.doi.org/10.1016/j.ijindorg.2010.06.001
Version: Published
DOI: 10.1016/j.ijindorg.2010.06.001
URI: https://dspace.lboro.ac.uk/2134/14680
Publisher Link: http://dx.doi.org/10.1016/j.ijindorg.2010.06.001
ISSN: 0167-7187
Appears in Collections:Closed Access (Business School)

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