Sunk capital , unions and the hold-up problem : Theory and evidence from cross-country sectoral data

@inproceedings{Cardullo2016SunkC,
  title={Sunk capital , unions and the hold-up problem : Theory and evidence from cross-country sectoral data},
  author={Gabriele Cardullo and Maurizio Conti and Giovanni Sulis},
  year={2016}
}
In this paper we study the hold-up problem by considering the effect of union bargaining power on the level of investment per worker across sectors characterised by different levels of sunk capital investment. We develop a search and matching model with heterogeneous sectors and ex-post collective wage bargaining and test the predictions of the model using a difference-in-difference approach on manufacturing sector data in a set of OECD countries during the period 1980–2000. We find that union… CONTINUE READING

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