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Firm Investment Behavior and Collective Bargaining Strategy
Author(s) -
HIRSCH BARRY T.
Publication year - 1992
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/j.1468-232x.1992.tb00300.x
Subject(s) - investment (military) , bargaining power , collective bargaining , labour economics , capital (architecture) , economics , business , microeconomics , archaeology , history , politics , political science , law
Using survey data on labor union coverage at the firm level, this paper examines union‐nonunion differences in investment activity among 706 U.S. companies during the 1970s. Consistent with a model of union rent seeking, firm‐level collective bargaining is associated with significantly lower physical capital and R&D investment, even after controlling for firm and industry characteristics. Deleterious union effects on investment are considerable throughout the 1972–80 period, but they vary across industries. Without significant changes in collective bargaining power or strategies, diminished investment activity by unionized companies is likely to exacerbate the already considerable decline in U.S. union coverage