The Economic Consequences of Labor Unionization: Evidence from Stock Price Crash Risk
Jun Chen (),
Jamie Y. Tong (),
Wenming Wang () and
Feida Zhang ()
Additional contact information
Jun Chen: Zhejiang University
Jamie Y. Tong: University of Western Australia
Wenming Wang: Hong Kong Baptist University
Feida Zhang: Murdoch University
Journal of Business Ethics, 2019, vol. 157, issue 3, 775-796
Abstract This study investigates the impact of labor unionization on stock price crash risk. We find that labor unionization is negatively associated with stock price crash risk. Such negative relation is more pronounced when firms can intimate more credible evidence on unfavorable prospects and when firms face more powerful labor unions. Our findings are consistent with the notion that firms take strategic actions to reduce the bargaining advantages enjoyed by labor unions and that labor unions force firms to take less risky investments and discontinue underperformed projects more timely, which leads to lower stock price crash risk.
Keywords: Labor unions; Bargaining position; Crash risk; Risk aversion (search for similar items in EconPapers)
JEL-codes: G14 G30 G32 J52 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s10551-017-3686-0 Abstract (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:jbuset:v:157:y:2019:i:3:d:10.1007_s10551-017-3686-0
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2
Access Statistics for this article
Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman
More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla ().