Show Less

International Handbook of Trade Unions

Edited by John T. Addison and Claus Schnabel

This Handbook is an authoritative and invaluable reference tool, uniquely analysing the forces governing unionism, union behaviour and union impact from a variety of perspectives, both theoretical and empirical. The 14 chapters are written in an accessible style by acknowledged leading specialists from the fields of economics and industrial relations. They offer a truly international perspective on this important subject.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 9: Unions and Innovation: A Survey of the Theory and Empirical Evidence

Naercio Menezes-Filho and John Van Reenen


Naercio Menezes-Filho and John Van Reenen 1. Introduction The role of trade unions in the economy has always been the subject of intensive debate. Traditionally, the theoretical literature emphasized the role of unions in distorting relative prices and the empirical studies concentrated on the determinants of union membership and on the effect of unions on wages and profitability. More recently however, economists have focused on the role of unions as ‘taxing’ the returns on sunk capital and on the design of efficient contracts, whereas applied economists shifted their attention to the long-term effects of unions, that is, on investment, technology and productivity growth. The reason for this shift of emphasis is clear. If the presence of strong unions led the firms to reduce capital and R&D (research and development) investments then unionized firms would tend to lose market share. In turn this would mean that the unionized sector would shrink and eventually trade unions would disappear from the economy.1 In a closed economy unions could organize an entire industry in order to avoid withering away, but this option is unavailable in an open economy, where a unionized industry will be undermined by competition from countries with weaker unions.2 Some commentators have contrasted the high R&D and dynamic innovation of the USA (where unions are weak) with the relatively lower R&D and slower innovation of Europe (where unions are strong) and drawn the conclusion that unionized labour markets may be at the heart of...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.