%0 Report
        %A Cardullo, Gabriele
%A Conti, Maurizio
%A Sulis, Giovanni
        %T Unions, Two-Tier Bargaining and Physical Capital Investment: Theory and Firm-Level Evidence from Italy
        %D 2018
        %8 2018 Nov
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 12008
        %U https://www.iza.org/publications/dp12008
        %X In this paper we present a search and matching model in which firms invest in sunk capital equipment. By comparing two wage setting scenarios, we show that a two-tier bargaining scheme, where a fraction of the salary is negotiated at firm level, raises the amount of investment per worker in the economy compared to a one-tier bargaining scheme, in which earnings are entirely negotiated at sectoral level. The model's main result is consistent with the positive correlation between investment per worker and the presence of a two-tier bargaining agreement that we find in a representative sample of Italian firms.
        %K hold-up
%K two-tier bargaining
%K control function
%K investment
%K unions