c DO UNIONS INFLUENCE THE DIFFUSION OF TECHNOLOGY? > JEFFREY H. KEEFE* This study examines how unions affect the diffusion of manufactur- ing process technologies. Analyzing informalion from the 1983 Industry Wage Survey of the Nonelectrical Machinery Industry, which provides esiablishmeni-Ievel data on union status and the use of seven advanced manufacturing process technologies, the author finds that unionized plants were more likely than nonunion plants to be using advanced technolog). This pattern, however, apparently reflects not the effect of unionism, but of plant size and the use of shift work, hoth of which are related to unionism. Statistical tests reveal no dirett union effect on ihe diffusion of the seven advanced manufacturing technologies. H ow do unions inlluence the diffusion of pnjcess technologies? Four com- peting hypotheses about union influence on technological diffusion can be derived from the economics and industrial rela- tions literatures. One hypothesis is that unions accelerate diffusion by pursuing high-wage policies or creating a positive environment in which to manage techno- logical change. Negative scale effects or union rent capturing, on the other hand, suggest that unions hinder modernization by depriving the firm of necessary capital *The author is Assistant Profes5or of Industrial Relaiions and Human Resources. Institute of Man- agement and t-abor Relations, Ruigers University. He ihanks .\drieniu- Eaioii. Michael Ooidoii. Harry Kai?. and Douglas Kruse for useful comments made on earlier draft.", of this paper; George Stelluio. Assistant Commissioner. OrCice of Wages and Indus- trial Relations, Bureau of Uibtir Statistics, for making the Industn.' Wage Survey available; and. especially. Carl Barsky for his yeoman work in constructing the micnKlata set. Helpful research assistance was pro- %ided by Susan Schwartz. The data and programs used in this study are available on request to the author at ihe Industrial Relations and Human Resourte Deparimeiu. Rui- gers Unisersitv, RiKkefeller Road. P.O. Bn\ Stlti'J. New Brunswick. N| 08903-5062. through high wage demands or by devel- oping work rules that make the substitu- tion of new technology' for union labor too expensive. Alternatively, bargaining models or effi- cient contract models indicate that unions may have no effect on technological diffusion, since higher union wages are offset by increased productivity, the cap- ture of economic rents, or efficient har- gaining. Finally, institutional atid histori- cal perspectives indicate that there is no single union effect; since different unions operate in different environments and have different political leaderships, they formulate distinct and dissimilar policies toward techn(}lt)gy. ranging from encour- agement to opposition, The objective of ihis study is to test those four hypotheses. The data I use, which are from the nonelectrical machine industry, are particularly well suited for that examination because they are at the establishment level, they include indenti- fication of specific major unions, and they cover seven advanced manufacturing pro- cess technologies. Industrial and Ijihor Relations Review, Vol. 44. No. 2 (Januar>' 1991). © by Cornell Universiiy. 0019-7939/91/4402 $01.00 261