The document discusses several studies that have shown mixed results on the relationship between labor unions and innovation. Some studies found unions have a negative effect by raising wages and allowing strikes, while others found positive effects from unions adapting technology and improving worker morale. The purpose of the proposed research is to investigate whether unions lead to increased productivity and reduced employee turnover by providing stability, and to consider how market competitiveness affects this relationship. Data will be collected through surveys in Pakistan and analyzed using statistical software to contribute new understanding of how unions can help firms achieve their objectives.

1. There is considerable interest in how labor market conditions affect innovation. Much of the existing work on this
showed mixed results. Several studies showed a negative picture of unions in that they raise wages
above the equilibrium level, encourage shirking, and lower society’s output because of the ability (and
realization) of workers to go on strike but some other studies showed positive effects of unionization
in adapting technology and enhancing innovation.
Significance of the Research
Considering the studies of mixed results of labor union on firm innovation. The purpose of this is to
check whether unions lead to increased productivity and reduce employee turnover giving
employment stability, by improving morale and cooperation among workers. Also, By creating a
union-nonunion wage differential, unions can affect the employment stability of both union and
nonunion workers. The union impact on employment stability has implication. It will hence attempt
to investigate this relationship and also consider the effects of market competitiveness on this
relationship to provide a comprehensive study on the matter.
Methodology and Implication
Data will be collected from startup firms and labor unions of Pakistan(using 2016 to 2022)as the
period of consideration) through structured online questionnaires using established scales of
measurement, and the data collected will be analyzed using SPSS (Statistical Package for Social
Sciences. The expected outcome of the study will offer a significant contribution to the current
literature on the effect of labor unions on employees and firms, by showing that the existence of
strong labor unions can help a firm in its objectives.

2.  First, a large body of literature has investigated labor union effects on R&D investments [16,18,56–
63]. Almost all of the existing research indicates that labor unions have a negative effect on R&D
investment. The results are based on a union rent-seeking tendency. The tendency refers to desire by
labor unions to retain quasi-rents of the return generated from long-term R&D and capital
investment. In compliance with the tendency, firms decrease their investment in intangible and
tangible assets . Only a few researchers have found that labor unions have a positive effect in low-
tech industry firm’s R&D, or a negative effect in high-tech industry firm’s R&D.
 Second, Machin and Wadhwani and Daniel researched labor unions and their effect on technology
acceptance. These studies suggest that labor unions have a positive effect on worker acceptance of
advanced technology. Third, some scholars have analyzed the relationship between labor unions and
technology innovation activity. These papers found that unionism has a positive effect on product
innovation-related activities.
 Finally, other papers have investigated the labor union effect on R&D outputs [17,70–72]. While
many studies revealed that unionism has a negative effect on firm R&D outputs, a few sources from
literature found that when union density and bargaining power for wages are appropriate, labor
unions have a positive effect.