Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/266199 
Year of Publication: 
2022
Series/Report no.: 
GLO Discussion Paper No. 1195
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
This paper investigates the impact of firm-level collective bargaining on firms' investment in intangible assets and, specifically R&D. While standard hold-up theories predict a negative effect of organized labour on intangible investments, the inclusion of pay-for-performance schemes in complementary negotiation can actually invert the prediction. Moreover, the industrial relation literature suggests that, in presence of asymmetric power relations, firm-level collective bargaining can allow workers to make their voice heard and induce management to invest in assets that drive competition away from wages, including R&D. We exploit a rich and representative survey on Italian non-agricultural companies conducted by the National Institute for the Analysis of Public Policies (INAPP) to test these predictions. Baseline estimates suggest that the presence of second-level collective bargaining is associated with higher investments in R&D and that power relation is the main mechanism driving this result. These findings are confirmed also in a robustness check where we exploit size contingent legislation governing the creation of employee representative bodies involved in firm-level bargaining in a regression discontinuity design (RDD) framework. The implications for the design of innovation policy are discussed.
Subjects: 
R&D
Intangibles
Unions
Collective Bargaining
Complementary Negotiation
JEL: 
J50
O32
O33
Document Type: 
Working Paper

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