Labor Unionization Structure, Innovation, and Welfare

Abstract

We show the effects of cooperation among the labour unions with complementary workers on innovation, consumer surplus and welfare. Although cooperation among the unions reduces wage, it may either increase or decrease the firm's incentive for innovation, and may also make the consumers and the society worse off by reducing innovation. While cooperation (compared to non-cooperation) among the unions makes the workers better off, it may not make all final goods producers better off. (JEL: D43; J51; L13; O31)

Cross ownership, union bargaining with managerial delegation, and stakeholders conflicts

“…This paper is related to Le Pape and Wang (2018, 2020) and Wang et al (2022), which separately examined the effect of product differentiation, firms' corporate social responsibility activities, and cross‐ownership on the conflict between principal stakeholders. This paper is also highly related to Fanti (2013), Mukherjee (2013), Han and Mukherjee (2017), and Buccella (2015, 2019), which separately investigate the effect of cross‐ownership, innovation, product differentiation, and strategic trade policies in a unionized industry. Considering that Fanti and Buccella (2017) show the significant effect of the bargaining agenda timing on the benefit of stakeholders, we, in particular, study the cases that (1) the owners negotiate with the labor union first, and set a managerial delegation to managers second; (2) the owners concurrently negotiate with the labor union and managers, which was concerned by Meccheri and Fanti (2014, 2018) in a Cournot duopoly.…”