Park, Jiyong, Myunghwan Lee, Yoonseock Son, Gene Moo Lee. “From Caution to Collaboration: Labor Unions, AI Investment, and Firm Value”, Under Review.

• The first three authors equally contributed to the work.
• Presentations: CIST (2024), WISE (2024), ISR-PDW (2025).
• Nominated for Best Paper Award at WISE 2024

Despite growing debates about Artificial Intelligence (AI) and the future of work, little is known about how firms’ efforts to build AI capabilities interact with workforce dynamics. As labor unions become key stakeholders in discussions on AI, we examine how unionization influences firms’ AI investments and moderates their impact on firm value. Using a novel dataset of U.S. public firms that integrates human capital–based measures of AI investment, unionization status, and a range of operational and employee-perception indicators, we employ a long-difference design to capture changes in AI investment and firm value. Our findings show that unionization is associated with cautious AI investments, especially in firms with lower perceived job security and operations more exposed to AI disruption. Rather than simply resisting AI adoption, union presence appears to prompt additional organizational scrutiny to ensure that AI initiatives align with workforce interests. Consistent with this view, we find that unions can amplify the value-creating effects of AI, particularly in firms with stronger labor relations, reflected in active employee involvement and higher job-security satisfaction. Taken together, these findings highlight unions’ dual role: tempering and disciplining AI investments at the adoption stage while enhancing downstream value realization through more deliberate and workforce-aligned implementation.