TY  - RPRT
        AU  - Cardullo, Gabriele
AU  - Conti, Maurizio
AU  - Sulis, Giovanni
        TI  - Unions, Two-Tier Bargaining and Physical Capital Investment: Theory and Firm-Level Evidence from Italy
        PY  - 2018/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 12008
        UR  - https://www.iza.org/publications/dp12008
        AB  - 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.
        KW  - hold-up
KW  - two-tier bargaining
KW  - control function
KW  - investment
KW  - unions
        ER  -