The (non-) effect of labor unionization on firm risk: Evidence from the options market

Mohamed Ghaly, Alexandros Kostakis and Konstantinos Stathopoulos

Journal of Corporate Finance, 2021, vol. 66, issue C

Abstract: Labor unionization has no causal effect on firm risk. Using a regression discontinuity design to study the impact of labor union elections on option-implied firm risk, we find that unionization per se does not affect investor perceptions about firm price, tail, or variance risk. This finding is robust to studying very short (5-trading day) and long (up to 2-year) windows around the elections. Moreover, there is no unionization effect on firm risk either in subsets of firms facing strong union bargaining power, or with characteristics that prior literature identifies as important determinants of the effect of unionization on firm outcomes.

Keywords: Unionization; Labor power; Option-implied firm risk; Regression discontinuity design (search for similar items in EconPapers)
JEL-codes: G30 G32 J51 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0929119920302601
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:66:y:2021:i:c:s0929119920302601

DOI: 10.1016/j.jcorpfin.2020.101816

Access Statistics for this article

Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter

More articles in Journal of Corporate Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().