Labor Union Effects on Innovation and Commercialization Productivity: An Integrated Propensity Score Matching and Two-Stage Data Envelopment Analysis

Abstract

Research and development (RD) is a critical factor in sustaining a firm's competitive advantage. Accurate measurement of RD productivity and investigation of its influencing factors are of value for RD productivity improvements. This study is divided into two sections. The first section outlines the innovation and commercialization stages of firm-level RD activities. This section analyzes the productivity of each stage using a propensity score matching (PSM# and two-stage data envelopment analysis #DEA# integrated model to solve the selection bias problem. Second, this study conducts a comparative analysis among subgroups categorized as labor unionized or non-labor unionized on productivity at each stage. We used Korea Innovation Survey #KIS# data for analysis using a sample of 400 Korean manufacturers. The key findings of this study include: #1# firm innovation and commercialization productivity are balanced and show relatively low innovation productivity; and #2) labor unions have a positive effect on commercialization productivity. Moreover, labor unions are an influential factor in determining manufacturing firms' commercialization productivity.