Union structure and firms’ incentives for cooperative R&D investments Constantine Manasakis and Emmanuel Petrakis Department of Economics, University of Crete Abstract. We investigate the impact of alternative unionization structures on firms’ in- centives to invest on cost-reducing R&D and to form Research Joint Ventures (RJVs), in the presence of R&D spillovers. We show that if firms invest non-cooperatively and spillovers are low, R&D investments are higher under centralized rather than under de- centralized wage-setting. In contrast, investments are always higher under decentralized wage-setting in the case of RJVs. Firms’ incentives to form an RJV are stronger un- der centralized wage-setting if and only if spillovers are low enough. Finally, centralized wage-setting may hinder the formation of costly RJVs and their potential welfare benefits. JEL classification: J51, L13, O31 Structure syndicale et incitations des firmes ` a des investissements coop´ eratifs en R&D. On examine l’impact des structures syndicales sur les incitations des firmes ` a investir dans la R&D pour r´ eduire ses coˆ uts, et ` a former des partenariats de recherche (PDR) quand la R&D a des effets externes de d´ ebordement. On montre que si les firmes investissent de mani` ere non-coop´ erative, et que les d´ ebordements sont faibles, les investissements en R&D sont plus ´ elev´ es quand le processus de d´ etermination des salaires est centralis´ e plut ˆ ot que d´ ecentralis´ e. A contrario, les investissements sont plus ´ elev´ es quand le processus de d´ etermination des salaires est d´ ecentralis´ e, si les PDR existent. Les incitations des firmes ` a former des partenariats sont plus fortes quand le processus de d´ etermination des salaires est centralis´ e si et seulement si les d´ ebordements sont assez bas. Finalement le processus de d´ etermination des salaires centralis´ e peut nuire ` a la formation de partenariats coˆ uteux et ` a la r´ ealisation de b´ en´ efices de bien-ˆ etre potentiel. We are grateful to two anonymous referees for valuable comments and suggestions. We would also like to thank Chrysovalantou Milliou and Minas Vlassis, as well as the participants at the CRETE 2004 Conference, Syros, Greece, the ASSET 2004 Meetings, Barcelona, Spain, and the Seminars Series, Department of Economics, University of Ioannina, for their helpful comments and suggestions. Full responsibility for all shortcomings is ours. Email: petrakis@econ.soc. uoc.gr; manasakis@stud.soc.uoc.gr Canadian Journal of Economics / Revue canadienne d’Economique, Vol. 42, No. 2 May / mai 2009. Printed in Canada / Imprim´ e au Canada 0008-4085 / 09 / 665–693 / C  Canadian Economics Association