Topic: Providing Protection or Misaligning Incentives? The Effects of Labor Unions on Innovation
Speaker: Xuan Tian, Assistant Professor of Finance, Indiana University
Date: November 25, 2013 (Mon.)
Time: 1:00-2:30pm
Location: Building 4, Room 101
Language: English
Abstract:
We examine the causal effect of unionization on firm innovation. To establish causality, we use a regression discontinuity design relying on “locally” exogenous variation generated by elections that pass or fail by a small margin of votes. Passing a union election leads to an 8.7% (12.5%) decline in patent quantity (quality) three years after the election. A reduction in R&D expenditures, reduced productivity of current and newly hired inventors, and departures of innovative inventors appear plausible mechanisms through which unionization impedes firm innovation. Our paper provides new insights into the real effects of unionization and has important implications for policy makers when they alter union regulations or labor laws to encourage innovation.
About the speaker:
Dr. Xuan Tian is an Assistant Professor of Finance at the Kelley School of Business at Indiana University. Dr. Tian received his Ph.D. from Boston College in 2008 and his B.A. from Beijing University, China, in 2001. He is an award winning researcher in the areas of corporate finance and financial intermediation with special research interests on venture capital, private equity, and corporate innovation. His research has been published in leading academic journals including the Journal of Finance, Journal of Financial Economics, and Review of Financial Studies.
His single-authored article “The Causes and Consequences of Venture Capital Stage Financing” won the 2011 Jensen Prize (2nd place) for best paper published in the areas of corporate finance and organizations in the Journal of Financial Economics. His article “Disciplining Delegated Monitors: The Consequences of Preventing Fraud” won the Best Paper Award in Financial Markets and Institutions at the 2012 Financial Management Association (FMA) meetings. Dr. Tian won the Kelley School of Business Research Excellence Award (Assistant Professor Level) in 2012.
Dr. Tian’s research has been presented at numerous university workshops and academic conferences such as the National Bureau of Economic Research (NBER) meetings, the Western Finance Association (WFA) meetings, the American Finance Association (AFA) meetings, and the American Economic Association (AEA) meetings.
