Wage bargaining and product innovation: The role of market expansion effect

Basak, Debasmita; Hoefele, Andreas; Mukherjee, Arijit

Abstract

Using the right-to-manage model of union-firm bargaining, we show that a higher union power increases product innovation if the bargaining is decentralised, the market expansion effect is weak, and the cost of innovation is relatively low. Otherwise, the relationship between union power and innovation is negative. Hence, we contribute to the literature in two ways. Unlike the extant theoretical literature, we consider the effects on product innovation, which is empirically relevant but has been ignored in the theoretical literature and explain a positive relationship between union power and innovation.

Citation

Basak, D., Hoefele, A., & Mukherjee, A. (2022). Wage bargaining and product innovation: The role of market expansion effect. Manchester School, 90(3), 319-340. https://doi.org/10.1111/manc.12398

• Journal Article Type: Article
• Acceptance Date: Jan 9, 2022
• Online Publication Date: Feb 11, 2022
• Publication Date: 2022-06
• Deposit Date: Jan 10, 2022
• Publicly Available Date: Feb 12, 2024
• Journal: Manchester School
• Print ISSN: 1463-6786
• Electronic ISSN: 1467-9957
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 90
• Issue: 3
• Pages: 319-340
• DOI: https://doi.org/10.1111/manc.12398
• Keywords: Centralised bargaining; Decentralised bargaining; Product innovation; Union utility
• Public URL: https://nottingham-repository.worktribe.com/output/7220203
• Publisher URL: https://onlinelibrary.wiley.com/doi/10.1111/manc.12398
• Additional Information: This is the peer reviewed version of the following article: Basak, D., Hoefele, A., & Mukherjee, A. (2022). Wage bargaining and product innovation: The role of market expansion effect. The Manchester School, 00, 1– 22., which has been published in final form at https://doi.org/10.1111/manc.12398. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.