A new GLO Discussion Paper finds 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.
GLO Discussion Paper No. 1195, 2022
Organized Labour and R&D: Evidence from Italy – Download PDF
by Cetrulo, Armanda & Cirillo, Valeria & Landini, Fabio
GLO Fellow Fabio Landini
Author 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.
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Vol. 36, Issue 1, January 2023: Meet the authors of all 16 articles of this issue online on December 1, 2022 during the GLO Global Conference 2022.
PUBLISHED
Vol. 35, Issue 4, October 2022: Journal of Population Economics (JOPE): 15 articles https://link.springer.com/journal/148/volumes-and-issues/35-4
CiteScore of JOPE moves up from 3.9 (2020) to 6.5 (2021). LINK
Similar, its Impact Factor is now 4.7 (2021) after 2.8 (2020)! LINK
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