U.S. unionism and R&D investment: Evidence from a simple cross-country test

This paper implements Freeman’s suggestion that insights into the effect of U.S. unionism on R&D investment may be obtained by correlating U.S. union density by industry with R&D investment by industry in another country, here Germany.     

Comparison of Localisation Motives for R&;D Investment of Multinational Enterprises in the New and Old EU Member Regions

The issue of localisation motives is one of the key topics in attracting and motivating MNEs to establish or enhance their R&D activities abroad. The paper aims to compare localisation motives for R&D investment of multinational enterprises in the new and old EU member regions and to find out main localization motives differences among them. We have found out the key motives were technology/supply side factors, which strongly influence decision-making at MNEs in locating and maintaining R&D in all regions. In the more developed regions, the localisation is positively influenced also by the presence of other important/large (high-tech) companies and important universities in the region, which provide relevant services to MNEs. Localisation decisions in the new EU member regions were positively influenced particularly by presence of a quality and cheap labour force and a suitable R&D infrastructure and experience in R&D in these regions. Considerable differences between the old and new EU member states reflects their distinctive economic history, recent re-opening of their economies and consequences of the process of post-communist transition.     

Labor union effects on innovative activity

Union rent-seeking is considered a tax on firm returns from investments in innovative activity. We examine this proposition by considering the responses of firms in a 1985 survey on R&D and product innovation. Consistent with our model, we find that innovative activity is significantly less important for union than for similar nonunion firms. We conclude that innovative activity may be an important route through which union rent-seeking affects the long-run performance of firms. We appreciate the helpful assistance and suggestions received from our colleague Terry Seaks, Barry Bozeman at Syracuse University, and participants in the Vanderbilt Microeconomics Workshop.     

Innovation Policy Challenges in Transition Countries: Foreign Business R&D in the Czech Republic and Hungary

R&D expenditures of national firms decreased considerably and structural changes of R&D financing followed the fall of planned economy in the transition period of Central Eastern European economies. In the middle of the 1990s, business R&D started to grow in the Czech Republic and Hungary due to investments of foreign affiliates and restructuring of domestic companies. Nowadays multinational companies have a decisive share in business R&D in these countries, which entails special challenges for national innovation policy. In this paper, we look through the development of the Czech and Hungarian innovation policy considering MNEs R&D. We use case studies of the Czech automobile industry, the Hungarian pharmaceutical industry, and the new MNE-related university units and private universities to show how these companies influence innovation systems in transition economies.      

A concept for measuring network proximity of regions in R&D networks

This paper proposes a new measure for assessing the network proximity between aggregated units, based on disaggregated information on the network distance of actors. Specific focus is on R&D network structures between regions. We introduce a weighted version of the proximity measure, related to the idea that direct and indirect linkages carry different types of knowledge. First-order proximity arising from direct cross-regional linkages is distinguished from higher-order network proximity, resulting from indirect linkages in the R&D network. We use an macroeconomic application in which we analyse the productivity effects of R&D network spillovers across regions to illustrate the usefulness of a proximity measure for aggregated units.     

Research and Development Spillovers in Central and Eastern Europe

The present study considers the implications of different stages of economic integration for endogenous growth models with horizontal differentiation of the intermediate goods. It investigates the decline of the domestic R&D (research and development) sector for countries with lower initial stock of R&D due to partial integration in the form of free trade. The problem is investigated with empirical analysis for panel data for 12 EU accession countries in the period of 1990–2001. The specification relating the growth of total factor productivity, the domestic and the available foreign stock of R&D is estimated with first-differences, ordinary least-squares, dynamic panel data, and GMM methods. The time series are highly persistent and the applied procedures have different advantages according to the assumptions and the purpose of the analysis. All methods establish the comparable result that the foreign R&D stock interacted with the import share is a substantial and significant factor for the growth of total factor productivity. The role of the domestic R&D is insignificant for the growth of total factor productivity, verifying the decline of the sector with free trade.     

The interplay between formal project memberships and informal advice seeking in knowledge-intensive firms: A multilevel network approach

In this study we investigate the interplay between knowledge workers’ formal project team memberships and their informal interactions from a multilevel network perspective. Conceptualizing knowledge workers’ affiliation with project teams as a membership network and their interactions as an advice network, we discuss how shared project team memberships as well as multiple memberships influence patterns of informal exchange in knowledge-intensive organizations. To empirically determine the impact of formal organization on informal exchange we apply exponential random graph models for multilevel networks to relational data collected on 434 R&D employees working on 218 project teams in a high-tech firm in Germany. Our results show that employees sharing project memberships create advice ties to each other but do not exchange advice reciprocally. In addition, we find a negative relationship between having a high number of project memberships and informally seeking or providing advice.     

Corporate social responsibility driven innovation

This study identifies the substantial relationship between corporate social responsibility (CSR) and innovation activities of firms. Using the French Vigeo sustainability rating and the Thomson Reuters, we divided 619 firms into groups by their industry sectors, regions, and firm characteristics such as size and age. We premise that innovative investment is needed to prepare tomorrow's profits not only by considering investments in technology and in R&D, but also by dealing with sustainability to human, social, environmental, technical, and economic investments. Consequently, when the firm manipulates its short- and long-run business strategies, the consideration of the correlation between types of investment and CSR initiatives will lead to more cooperating effect on the outcome of investments. The findings provide a comprehensive understanding on the effect of sustainable management strategies on the innovation and sustainability of firms.     

Pay and productivity in “corporatist” Germany

Conventional theory predicts that productivity gains lead to pay hikes. Pay increases, however, can influence labor productivity. But what about the case of a corporatist economy, in which wage setting is highly coordinated? With cor-poratist cooperation between unions and management, is pay de-coupled from productivity? Using an innovative technique, this study disentangles the rela-tionship between pay and productivity in Germany. Citing high unemployment and increasingly global competition, critics have argued that Germany's brand of corporatist labor relations cannot survive. Our findings show that links between productivity and pay were different in the 1990s than in earlier years, suggesting that the collective bargaining process now works differently.     

R&D AND CREDIT RATIONING IN SMEs

We study the effects of credit rationing on research and development (R&D) investment using survey and accounting data on a large representative sample of manufacturing small‐ and medium‐sized enterprises (SMEs). Our econometric model accounts for the endogeneity of our credit rationing indicator and employs an innovative theory‐based identification strategy. We find that credit rationing has a significantly negative effect on both the probability to set up R&D activities and on the level of R&D spending (conditioned on the R&D decision), but the overall estimated reduction in R&D spending is largely to be associated with the first effect. (JEL G21, D82, O32, C35)     

Measuring the Role of Central and Eastern European Countries in World Drug Research

This paper explores the sociological behavior of firms in the pharmaceutical industry in Central and Eastern Europe as measured by funding linkages. Using the ISI Web of Science data-base, the number of research papers funded by top American and European pharmaceuticals with at least one author from Central and Eastern Europe are identified. Results indicate that Poland leads in the region by both the number of papers funded and by percentage of a firm’s total papers funded, followed closely by Hungary, Greece and the Czech Republic. Though the percentages of any firm’s linkages with a Central and Eastern European author are small (upper limit being 6.6%), this percentage is skewed due to the fact that the US is cited for 50% of papers for most firms. Roche Corporation is the top funder of papers among both US and European firms. Incidentally, zero top American pharmaceuticals were found to have an R&D center located in Central and Eastern Europe whereas European firms: GlaxoSmithKline and Sanofi-Aventis do—possibly indicating a difference in business strategy between European and American pharmaceuticals.     

The dual role of R&D expenditures in European Union’s member states: short- and long-term prospects

The objective of this article is to assess a potential dual role of public expenditures in R&D upon economic growth and employment, using these dimensions as partial representations of the socioeconomic state of affairs in European Union’s Member States. First, we look into direct, short-term impacts arising from R&D expenditures, much in the sense of a multiplier effect. Second, we analyse impacts from the stage of development of National Innovation Systems (NIS) upon the macroeconomic conditions of interest, assuming that current stages of development are products of previous commitment to innovation, that is, a structural, long-term outcome of innovation-oriented investments. In order to empirically test our propositions, we have analysed 28 EU Member States (1990–2013) through three sets of econometric (static and dynamic panel data) models. Results highlight that EU countries’ governmental commitment to their respective innovation systems catalyses current and prospective economic growth and employment levels, suggesting a complementarity between Neo-Schumpeterian and Neo-Keynesian perceptions over governmental R&D involvement. This can bring innovation efforts closer to the macroeconomic debate on monetary and fiscal policies and function as a criticism to austerity measures, as this may not only affect the present socioeconomic situation, but also generate the cornerstone for a perennial state of divergence among EU Member States.     

International and Intersectoral R&D Spillovers in the OECD and East Asian Economies

This study empirically explores international and intersectoral R&D spillover effects on the total factor productivity growth of manufacturing and nonmanufacturing sectors based on a pooled time-series data set of 14 OECD economies and 3 East Asian economies—Korea, Singapore, and Taiwan. The study finds that foreign manufacturing R&D has strong influence on domestic productivity growths of both sectors and that domestic manufacturing R&D has a substantial intersectoral R&D spillover effect on domestic nonmanufacturing productivity growth. The social rates of return to manufacturing R&D are estimated to be two to six times greater than the private rates of return.     

What are the likely interactions among innovation,government debt,and employment?

The study here analyzes the interactions among labor, R&D intensity, and public expenditure on education (indicators of innovation), considering public debt of countries. The study is based on 27 European countries over the 1995–2009 and applies multiple regression analysis. Main findings seem to be: a significant interaction of public expenditure on education and R&D intensity with employment rate, whereas an increase of general government consolidated gross debt has a negative interaction for employment rate as well as for technology indicators. The theoretical framework and empirical evidence suggest vital political economy implications to support employment rate during contractions of the business cycle. In particular, considering the specificity of the economic structure of countries, a fruitful lung-run political economy of growth should slowly dry out public debt by supporting GDP growth, rather than reducing government debt with high taxation and balanced-budget rules, in order to decrease frictional effects for patterns of economic, technological, and employment growth.     

Union attainment of first contracts: Do service unions possess a competitive advantage?

This study examines differences between service and manufacturing unions with respect to first contract attainment and organizing efficiency. Service unions were found to have a higher first-contract attainment rate, larger election units, and longer campaigns. For cases where the union attained a first contract, there was no difference in efficiency between service and manufacturing unions. However, service unions enjoyed an advantage over manufacturing unions when overall organizing efficiency was examined. This paper is based on data collected for a dissertation written at the Graduate School of Business at Columbia University. I gratefully acknowledge the support of committee members David Lewin, James Kuhn, Casey Ichniowski, and Seymour Spilerman of Columbia and Charles A. O’Reilly III of the University of California at Berkeley. I also thank John Delaney for his many helpful insights and suggestions during the course of my research and Gerald Ferris, Shannon Ratcliff, and Rick Fuentes for comments on an earlier draft of this paper. This research was supported by the Industrial Relations Research Center and the Management Institute at Columbia University, and the Department of Management at Texas A&M University.     

Measuring relative efficiency of government-sponsored R&D projects: A three-stage approach

Without considering differences in operating environment, traditional methods of efficiency evaluation are suffering from external environmental influences. This study presents an alternative approach for assessing the relative efficiency of government-sponsored research and development projects (GSP). A three-stage approach employing data envelopment analysis to evaluate efficiency and Tobit regression to control external variables was applied to 110 projects over 9 years. This study finds that firm size, industry, and ratio of public subsidy on research and development (R&D) budget of recipient firm significantly influences the technical efficiency of GSP in Taiwan. After controlling these external variables, the mean value of technical efficiency in the third stage increases and becomes significantly different to that in the first stage. Most GSPs increase their returns when their projects are scaled up. Furthermore, government policy makers must establish the upper-limit ratio of subsidies on R&D budgets of recipient firms to avoid inefficient use of public funds.     

Profiles of union organizers from manufacturing and service unions

This study uses data on 229 organizers from eight unions to assess differences in characteristics of organizers employed by manufacturing and service unions. The results suggest that a new breed of organizer is entering the labor movement through service unions-organizers who are younger, more highly educated, more socially mobile, and have less experience in the union movement than organizers from manufacturing unions. This article is based on data collected for a dissertation written at the Graduate School of Business at Columbia University. I gratefully acknowledge the support of committee members David Lewin, James Kuhn, Casey Ichniowski, and Seymour Spilerman of Columbia and Charles A. O’Reilly III of the University of California at Berkeley. I thank John Delaney for his many helpful insights and suggestions during the course of my research and Shannon Ratcliff and Rick Fuentes for comments on an earlier draft of this paper. This research was financially supported by the Industrial Relations Research Center and the Management Institute at Columbia University and the Department of Management at Texas A&M University.     

Social capital and innovation dynamics in district-based local systems

The idea behind this paper is that social capital (SC) is interpreted as a component of an investment, which implies entangled private and public benefits. Within a theoretical framework that considers SC as the public component of the impure public good R&D we show that the ‘civic culture’ of the district in which a firm is located is not a sufficient incentive for the firm to increase its investment in SC, because SC/networking dynamics might positively and complementarily evolve only if the opportunity cost of investing in innovation is sufficiently low. Consequently, we focus our attention on a specialised biomedical industrial district characterised by a strong pattern of innovative activity. We observe that R&D and networking/social capital arise as complementary driving forces of innovation outputs. When the empirical evidence confirms that this complementarity plays a key role, policy efforts should be targeted toward both market and non-market characteristics, rather than solely to the production of local public goods or innovation inputs as independent elements of firm performance. This is very important in terms of policy effectiveness. In fact, we argue that SC/networking dynamics might positively evolve only if the private opportunity cost of investing in R&D innovation is sufficiently low. Nevertheless, this exogenous economic incentive works as long as complementarity, as defined here, holds.     

The impact of labor unions on the passage of economic legislation

This paper examines the political power of labor unions. A model of the decision of an interest group to contribute to a political campaign is developed and tested. The empirical evidence indicates that interest groups, and unions in particular, use political contributions in a systematic and coordinated manner. Unions give money to candidates with relatively little seniority (who might otherwise not be elected) and to candidates from districts with about the average number of union members. Such candidates might otherwise not vote as the union would desire. The influence of campaign contributions and of union membership on the voting of congressmen on issues of interest to unions is also investigated. Union membership is sometimes significant and campaign contributions are always significant in explaining voting on minimum wages, wageprice controls, benefits for strikers, and OSHA and CETA appropriations. The indirect economic effects of labor unions — those effects which occur because unions influence legislation — may be as important as the direct effects which occur through collective bargaining.     

Public opinion and media coverage of labor unions

Public opinion about labor unions is influenced by a variety of factors, including media coverage. The type of media coverage unions receive provides a cognitive foundation for judgments about them and media coverage of unions has often been characterized as biased. This study examines media coverage of unions between 1946 and 1985 and shows that it became increasingly concentrated on strike activities and exaggerated the frequency of strikes. Moreover, strike-centered coverage has its strongest negative influence on individuals who lack ideological and group attachments to unions.