Abstract

This paper examines the empirical evidence of the role of union bargaining on innovation. We review the existing empirical evidence and emphasis 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 firm's relative R&D performance. The effects of union power are only negative when the (a) union density is very high; (b) the union bargains only over wages.

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