This paper examines how non-financial stakeholders, especially labor unions, affect firms’ innovation in business group affiliations. Using firm-level labor union data unique to Korea, we find that firms’ innovation activities are negatively related to unionization. This negative relationship is more pronounced for large business groups, suggesting that Korean chaebols are more concerned with the influence of powerful stakeholders—union workers. Also, equity market valuation of R&D reduction under union pressure is not negative for chaebol-affiliated firms, whereas it is negative for non-affiliated firms. These results indicate that the equity market perceives that chaebols’ internal capital market facilitates group-oriented R&D investment decisions.

中文翻译：

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工会对企业集团附属创新和市场估值的影响：来自韩国的新证据

本文考察了非金融利益相关者，尤其是工会，如何影响企业在商业集团从属关系中的创新。使用韩国独有的企业级工会数据，我们发现企业的创新活动与工会化呈负相关。这种负面关系在大型商业集团中更为明显，表明韩国财阀更关心强大的利益相关者——工会工人的影响。此外，工会压力下研发减少的股票市场估值对财阀附属公司不是负面的，而对非附属公司则是负面的。这些结果表明，股票市场认为财阀的内部资本市场促进了以集团为导向的研发投资决策。