Arbeitspapier

Unions and Firms' Investments: A Unified View

In this paper, we present a simple model in which a unionized and non-unionized firm optimally make investment decisions given their labor productivity. By allowing workers' organizations to have positive effects on labor effort, we find that the classic hold-up problem does not necessarily survive. We also derive conditions under which rent-seeking by unions may actually encourage firms' investments.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 12515

Classification
Wirtschaft
Trade Unions: Objectives, Structure, and Effects
Innovation and Invention: Processes and Incentives
Management of Technological Innovation and R&D
Subject
labor unions
rent seeking
workers' effort
firms' investments
hold-up

Event
Geistige Schöpfung
(who)
Berton, Fabio
Dughera, Stefano
Ricci, Andrea
Event
Veröffentlichung
(who)
Institute of Labor Economics (IZA)
(where)
Bonn
(when)
2019

Handle
Last update
10.03.2025, 11:45 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Berton, Fabio
  • Dughera, Stefano
  • Ricci, Andrea
  • Institute of Labor Economics (IZA)

Time of origin

  • 2019

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