Unions, Innovation, And Technology Adoption: New Insights From The Cross-Country Evidence
There is currently no consensus regarding the effect of unions on technology. The authors apply met regression analysis to the extant econometric studies and find that unions depress investment in new technology. However, this adverse effect has been declining over time and is moderated by country differences in industrial relations and regulations: The adverse effect appears to increase with labor market flexibility. Unions also have an adverse effect on technology adoption. The paper considers both the direct and indirect effects of unions and shows that their effect on technology is larger than their effect on profitability and physical capital. The size of the union effect on technology is compared to the effects of human capital, industry concentration, firm size, growth, profitability, and physical capital.