How does SQL Server determine the expression type when mixing Unicode and non-Unicode strings?
There are several situations in which two (or more) distinct things are being combined and yet there can only be a single result. These questions are resolved by applying a set of precedence rules. In this case, it would use both Datatype Precedence and Collation Precedence. But there is also logical precedence (when combining AND and OR without parenthesis) and how to deal with decimal computations of varying precision, etc). 


Data Type Precedence
Collation Precedence
Precision, Scale, and Length


Related:


Operator Precedence