union coverage and profitability among u s firms this paper utilizes unique survey data on labor union coverage at the firm level to examine union effects on the profitability of 705 u s companies during the 1970s market value and earnings are estimated to be about 10 15 percent lower in an average unionized company than in a nonunion company following extensive control for firm and industry characteristics deleterious union effects on firm profitability are sizable throughout the 1972 80 period but vary considerably across industries the relatively poor profit performance of unionized companies may help explain the recent decline in u s union membership the author thanks the w e upjohn institute for employment research for financial support elizabeth gregory for assistance with the union coverage survey zvi griliches for providing access to the rd donald deere terry seaks and anonymous referees for helpful suggestions and seminar participants at connecticut florida state harvard texas a m and william and mary for comments on earlier versions of this research

unions in a general equilibrium model of firm formation unions are introduced into a general equilibrium model of firm formation i find under reasonable conditions that large firms are more likely to be unionized and that unionized firms are more productive and better managed than nonunion firms of the same size as well unions reduce economic efficiency by distorting the occupation choice decision between managing a firm and working in one perhaps surprisingly this distortion persists even when individual union contracts set both wages and employment in a fully efficient manner but can disappear when the mechanism that allocates property rights to union jobs is changed in certain ways

the impact on economic performance of a transformation in workplace relations this study examines how a transformation in patterns of conflict and cooperation affected economic performance in 25 work areas of a large unionized manufacturing facility in the period 1984 87 unlike most studies of industrial relations and economic performance this study clearly distinguishes conflict from cooperation but evaluates the two together rather than focusing on only one an analysis of data collected from union and employer records and interviews strongly suggests that work areas with traditional labor management relations rooted in adversarial assumptions had higher costs more scrap lower productivity and a lower return to direct labor hours worked than work areas with transformational relations characterized by increased cooperation and improved dispute resolution

labor unions bargaining power and corporate bond yield spreads structural credit model perspectives abstract this study investigates labor union effects on bond yield spreads from perspectives of structural credit models by employing american bond observations from 2001 to 2007 this research finds that union strength significantly and positively relates to bond yield spreads this effect is roughly equal to that of issuer rating for one standard deviation change when controlling for well known variables the empirical results also show that the positive effects become weaker when management has higher bargaining power additionally union strength volatility significantly and negatively relates to bond yield spreads and capital structure leverage the above results are robust when controlling for credit ratings collinearity concerns industry effect and tax effect

does institutional shareholder activism stimulate corporate information flow abstract activist shareholders have an incentive to communicate and cooperate with other major shareholders however the impact of their activity on information flow surrounding targeted firms is largely unknown we explore this aspect using a prolific proponent labor unions following the mailing of proxies containing union sponsored shareholder proposals trading volume increases significantly and at issue bond yield spreads of targeted firms are lower compared to matched firms subsequent difference in differences analyses show that stock prices of targeted firms become more informative as a result of activism affirming the intuition that activism results in a reduction of differential information between outside investors

art as an investment and conspicuous consumption good ments art is also a consumption good art owners take pleasure in its intrinsic value e g for aesthetic pleasure or as a storehouse of an artist s deftness and to the extent that it is a luxury good they derive additional enjoyment from the signal of wealth that owning a masterpiece transmits it is the mixture of pecuniary and nonpecuniary payoffs to ownership that makes artworks both compelling to purchase and difficult to value i exploit this insight to explain why the measured risk premium of a portfolio of artworks is low compared to other risky assets in a consumption based pricing model an asset s risk premium is a function of the covariance of its returns with agents marginal utility of consump tion agents need to be compensated if the asset pays off in a period of already high utility as a luxury good relative art demand is an increasing function of wealth therefore positive shocks to income increase the demand price and returns to art in periods of high consumption utility implying a high risk premium this intuition is at odds with empirical studies that quantify the average financial returns of paintings relative to more traditional investment vehicles these studies find that art 1 often underperforms relative to equities and bonds while there have been

the effect of unions on the structure of wages a longitudinal analysis this paper studies the effects of unions on the structure of wages using an estimation technique that explicitly accounts for misclassification errors in reported union status and potential correlations between union status and unobserved productivity the econometric model is estimated separately for five skill groups using a large panel data set formed from the u s current population survey the results suggest that unions raise wages more for workers with lower levels of observed skills in addition the patterns of selection bias differ by skill group among workers with lower levels of observed skill unionized workers are positively selected whereas union workers are negatively selected from among those with higher levels of observed skill despite a large and sophisticated literature there is still substantial disagreement over the extent to which differences in the structure of wages between union and nonunion workers represent an effect of trade unions rather than a consequence of the nonrandom selection of unionized workers over the past decade several alternative approaches have been developed to control for unobserved heterogeneity between union and nonunion workers 2 one method that has been successfully applied in other areas of applied microeconometrics is the use of longitudinal data to measure the wage gains or losses of workers who change union status unfortunately longitudinal estimators are highly sensitive to measurement error even a small fraction of misclassified union status changes can lead to significant biases if the true rate of mobility between union and nonunion jobs is low this sensitivity led lewis 1986 to essentially dismiss the longitudinal evidence in his landmark survey of union wage effects in this paper i present some new evidence on the union wage effect based on a longitudinal estimator that explicitly accounts for misclassification errors in reported union status the estimator uses external information on union status misclassification rates along with the reduced form coefficients from a multi variate regression of wages on the observed sequence of union status indicators to isolate the causal effect of unions from any selection biases introduced by a correlation between union status and the permanent component of unobserved wage heterogeneity recognizing that unions may raise wages more or less for

union negotiations and corporate policy a study of labor concessions in the domestic steel industry during the 1980s abstract this paper studies managerial compensation financial reporting and dividend policies of the seven major domestic steel producers during requests for union concessions substantial layoffs reported losses and sacrifices by nonunion stakeholders buttressed managers case for union concessions from 1980 to 1988 sample firms reduced their work force by about 300 000 almost two thirds and annual wage payments from 16 1 to 8 6 billion reported income is lower during union negotiations controlling for cash flows as is managerial pay with average ceo salary plus bonus declining 18 dividend reductions and white collar pay cuts are substantial pervasive and clustered during union negotiations

exploring spatial dynamics with land price indexes the purpose of this study is to explore the within region spatial dynamics of appreciation and depreciation rates using three different representations of geographical space mean value indexing methods are used to construct global land price indexes sub market land price indexes and local land price indexes using transaction price data for vacant residential land within the city of hamilton ontario between 1995 and 2003 the results are validated against statistics canada s series of new housing price indexes followed by a comparison of the relative performance of the three geographical representations of land price indexes the results indicate that the mean value indexing methods are robust although subject to outliers and sample selection bias and clearly illustrate the spatial dynamics of annual appreciation and depreciation rates across the study area the results also underscore the need for regular surveillance of the spatial dynamics of urban land markets

equal employment opportunity law and firm profitability based on a sample of 260 cases reported in the wall street journal between 1964 and 1986 this study finds that the equity value of firms charged with violating equal employment opportunity eeo laws fell at the time that a suit decision or settlement was announced most dramatically the value of firms involved in class action suits fell 15 6 percent on average around the time of the suit further the average loss to shareholders exceeds the amount firms are required to spend to settle the case this may be due to the expected costs of changing employment practices or to the information about the firm s management that is revealed by the case a staggering number of statutes amendments and court decisions regulating equal opportunity in employment have been passed during the past 25 years firms found guilty of violations of equal employment opportunity laws have been required to pay millions of dollars in back pay and to alter their employment practices to comply with the laws this study measures the costs to firms resulting from government and private lawsuits and the further costs of losing those suits i address this question by examining changes in the market value of the equity of firms at the time a lawsuit is filed for a violation of an equal employment opportunity eeo law and at the time a decision of guilty or a settlement

from the fringe to the fore labor unions and employee compensation conventional wisdom suggests that labor unions raise worker wages while the newer empirical literature finds only negligible earnings effects i reconcile this apparent contradiction by arguing th

the effect of two tier collective bargaining agreements on shareholder equity this study uses an event time methodology to examine the impact of two tier agreements on shareholder equity from 1981 through 1986 following announcements of two tier agreements about half of the firms in the sample had negative abnormal returns returns with values below the expected market returns and half had positive abnormal returns because the positive returns exceeded the negative returns in absolute value however there was a statistically significant increase in mean firm value the abnormal returns averaged between 2 and 4 over a 10 to 12 week period following the announcement a figure that approximately equals the transactions cost of a stock purchase the authors speculate that this rather low average gain may help explain the marked decline of new two tier agreements during the latter half of the 1980s

discoveries of fakes their impact on the art market despite the dramatic surge in the production of fakes their impact on the art market remains unexplored this paper investigates the overall impact that the discovery of a fake painting for example a fake gauguin has on the market for paintings from the same artist gauguin s artworks before the fake s discovery artworks are less likely to be sold through sotheby s or christie s suggesting that sellers may wish to avoid their extensive scrutiny however when fakes have been discovered sellers rely more often on these auction houses probably because they are viewed as providing a credible form of certification surprisingly fake discoveries have almost no impact on the probability to sell an artwork prices only react negatively with a lag suggesting that sellers try to postpone their sales as long as possible eventually close to a year after fakes have been made public prices increase indicating that buyers view the market as purged

do unions reduce investment evidence from canada the authors test for a link between unionization and net investment rates in canadian manufacturing analysis of data on 18 industries for the years 1967 87 reveals a negative non linear relationship the presence of unions appears to have reduced investment when the percentage of firms in the industry that were unionized was between 0 and approximately 50 with a plateau or slight positive marginal effect above this level in an industry moving from no unions to the mean level of unionization net investment and gross investment are predicted to fall by 66 74 and 18 25 respectively

unionization and profitability evidence of spillover effects ruback and zimmerman s 1984 event study which showed that formal union organizing activity significantly lowers a firm s market value provides compelling evidence that unionization reduces a firm s profitability union organizing activity may also have sizable cross firm or spillover effects on the performance of neighboring firms thus the total impact of union organizing on the wealth of firm owners may be substantially understated by focusing only on the firm in which the union organizing activity occurs this paper presents an alternative approach for estimating union spillover effects on profitability using a data set and methodology similar to ruback and zimmerman s we find that the total negative effects of unionization on profits after cross firm or spillover effects are included are nearly three times as large as the own firm effects reported by ruback and zimmerman the hypothesis that changes in unionization have spillover effects on nonunion firms is well known formal union organizing activity at one firm may increase the threat of unionization at other firms neighboring firms may respond to the greater threat of unionization

mixing housing tenures is it good for social well being mixing tenures is now a widely accepted policy designed to tackle problems of social exclusion in disadvantaged neighbourhoods however the evidence base for mixing tenures is fragmented and ambiguous with few exceptions studies of mixed tenure effects have been small one off investigations of individual communities providing only a rudimentary basis for comparative evaluation in attempting to address these issues a national level ecological analysis of mixed tenure in great britain was conducted using aggregate data from two decennial censuses and geocoded vital registrations asking the question whether mixing housing tenures is good for social well being the objective of the research is to establish under what if any circumstances tenure mixing is positively related to indicators of the social well being of an area s population the findings provide little support for positive outcomes and lead the authors to question the efficacy of mixing tenures as a policy for improving social well being

internal cooperation and competitive success the case of the us steel minimill sector since the 1960s american steel minimills have captured markets once dominated by the american integrated steel producers this article argues that the minimills competitive success is due in part to their ability to cultivate and sustain flexible and participative internal labor market and industrial relations systems they have accomplished this by reducing internal sources of conflict among plant level workers and managers through the absence reduction or elimination of factors contributing to their vulnerability to higher level decisions the sector s market success has permitted the institutionalization of chosen strategies and structures and reinforced the virtues circle of convergent interests internal accord organizational responsiveness and product market success c 1995 academic press ltd copyright 1995 by oxford university press

art as a wartime investment conspicuous consumption and discretion the financial underperformance of art as an investment is well documented in contrast to studies conducted on peace time periods this paper shows that the art market in occupied france during wwii significantly outperformed all alternative investments bonds equities as well as currencies exchanged on the black market other than gold this suggests that art may be a good hedge against low probability disasters the paper further demonstrates that motives to purchase art consumption and investment vary over time in his theoretical model mandel 2009 attributes art s low return to the utility derived from conspicuous consumption in occupied france during wwii conspicuous consumption was impossible for artworks deemed degenerate by the nazis the price evolution of degenerate versus non degenerate artworks confirms the importance of conspicuous consumption in artworks pricing eventually the paper defines the concept of discretion the ability to store a large amount of value in small and easily transportable goods during wartime illegal activities and the risk of being forced to flee the country increased the interest for discreet assets as shown by the better performance of small and thus discreet artworks in comparison to large ones

the impact of labor unions on investment cash flow sensitivity abstract this paper empirically examines how labor unions affect investment cash flow sensitivity using samples from the us covering the period of 1984 2009 we find a significant positive union effect using a q model of investment the capital expenditures of firms are 1 71 times more sensitive to internal cash flows when unionization rates increase one standard deviation from the mean this effect holds when we control for other proxies of financial constraints in addition unionized firms are associated with lower cash cash flow sensitivity which suggests that the higher investment cash flow sensitivity in unionized firms is primarily driven by the incentive of these firms to reduce liquidity and enhance bargaining power against the union we also show that the above union effects become more pronounced during labor contract negotiation years

employment protection and takeovers labor restructuring is a key driver of takeovers and the associated synergy gains worldwide in a difference in differences research design we show that major increases in employment protection reduce takeover activity by 14 27 and the combined firm gains synergies by over half consistent with the labor channel behind these effects deals with greater potential for workforce restructuring show a greater reduction in volume number and synergies the reforms do impede layoffs and the associated wage costs match the magnitude of synergy losses offer prices are not fully adjusted with both bidders and targets exhibiting lower returns following the reforms

the effects of the nlra on stockholder wealth in the 1930s whereas most recent research examining the effects of the nlra on labor management relations has focused on the impact of specific provisions of the law this study provides an estimate of the impact of the passage of the nlra on 75 firms that were at great risk of being unionized in the 1930s taking changes in shareholder wealth as a measure of the shift in the balance of power caused by the nlra the authors find that the passage of the nlra caused a statistically and economically significant decline in shareholder wealth for the sampled firms specifically by april 1937 stockholder wealth in the firms was 15 9 lower than would have been expected had the nlra not been enacted t he impact of public policy on the balance of power between labor and management has always been a fundamental topic in industrial relations recent changes in many labor management relationships have renewed interest in the influence of public policy on labor relations and raised questions of how modifications in these policies might alter the behavior of the parties according to delaney lewin and sockell 1985 the empirical research on this topic has largely concentrated on specific provisions of the wagner act such as election procedures and regulation of employer unfair labor practices for example getman gold

the union impact on profits evidence from industry price cost margin data this paper uses industry price cost margin data to estimate the extent to which unions reduce profits estimates allowing for the endogeneity of union status are contrasted with estimates that assume union status is exogenous and not determined in part by either profitability or industry structure endogeneity is found to be an important consideration in estimating the union impact on profits two stage estimates are considerably larger than ols estimates the final section explores the total estimated redistribution from capital to labor in the manufacturing sector an important conclusion is that unions raise prices less than was previously believed

labor unions and tax aggressiveness abstract we examine the impact of unionization on firms tax aggressiveness we find a negative association between firms tax aggressiveness and union power and a decrease in tax aggressiveness after labor union election wins this relation is consistent with labor unions influencing managers in one or both of two ways 1 constraining managers ability to invest in tax aggressiveness through increased monitoring or 2 decreasing returns to tax aggressiveness that arise from unions rent seeking behavior we also find preliminary evidence that the market expects these reductions around union elections and discounts firms that likely add shareholder value via aggressive tax strategies

substantive issues in the definition of localities evidence from sub group local labour market areas in the west midlands coombes m g green a e and owen d w 1988 substantive issues in the definition of localities evidence from sub group local labour market areas in the west midlands reg studies 22 303 318 local labour market areas llmas are now widely accepted as the most appropriate areal units for analyses of spatial patterns of employment and unemployment the most commonly used set of llmas in britain are the travel to work areas ttwas of the department of employment these areas are increasingly being used for locality studies that encompass not only labour and demand trends but also their social and political implications however ttwas are defined on the basis of aggregate commuting patterns which generalize substantial differences in the journey to work behaviour of different sections of the workforce this paper compares the ttwas as revised in 1984 with llmas defined using the same methodology for four sub groups of the labour force with differing skill levels in the west midlands the numb

union membership in the united states 1973 1981 this paper reports estimates of union membership gathered from may current population surveys from 1973 to 1981 the authors present data by occupation industry selected states and smsas race gender and educational attainment the paper both extends and differs from that by freeman and medoff which presents unionism estimates for the private sector for 1968 75 to facilitate longitudinal analysis this paper reports three year moving averages of occupational and industry data and annual estimates of demographic classifications the data include public sector as well as private sector workers and they exclude workers not covered by the national labor relations act also the authors provide only union membership estimates not estimates on workers covered by union contracts this paper suggests that the percentage of all workers that are unionized in the united states remained fairly constant over the 1973 81 period

the impact of labour unions on external auditor selection and audit scope evidence from the korean market abstractwe examine whether labour unions influence external auditor selection and audit scope as a major user group of financial information labour unions likely demand financial information of high quality and thus high quality audits as a union s request for wage increases is likely strong when a firm is performing well management facing wage negotiations with the labour union has incentives to manipulate earnings downward and may therefore prefer auditors who allow more discretion using union data unique to korea during 2005 2008 we find that firms with a stronger labour union tend to choose higher quality auditors i e big n or industry specialist auditors we also find that unionization is negatively positively associated with positive negative abnormal audit fees and audit hours and the effects are more pronounced when the union is stronger and more active given that departures from normal audit fees and audit hours in either direction arguably impair audit quality this finding is con

compliance and enforcement decisions under the national labor relations act this article analyzes the growth of regulatory litigation under the national labor relations act by modeling the compliance and enforcement decisions made by the employers unions and workers covered by the act an empirical analysis of the model on time series data for 1950 80 confirms the importance of compliance and enforcement incentives in explaining the growth of unfair labor practice charges while some actions of the national labor relations board the regulatory agency established by the act influence these incentives and the resulting regulatory litigation changes in some important incentives notably relative labor costs are beyond the board s influence

how did japanese investments influence international art prices we test the luxury consumption hypothesis of ait sahalia parker and yogo 2004 using a unique international art price import export flow and stock market data set we find that the demand for art by japanese collectors is positively correlated with art prices and japanese stock prices this correlation is magnified during the bubble period of the japanese economy the mid 1980s to the early 1990s and gains even further strength for works of art typically favored by japanese collectors our results suggest that japanese investors or japanese asset markets indeed affect international art prices especially during the bubble period and its aftermath

art market inefficiency art is often used as an investment vehicle given the importance of market efficiency in finance we use a large auction based index to test whether the art market is weakly efficient evidence reveals that returns on artworks exhibit high positive auto correlation we attribute this result to price truncation resulting from unobservable reserve prices in auctions we conclude that the art market is not efficient mainly because price formation is opaque to outsiders who lack information on unsold artworks

ex post the investment performance of collectible stamps this paper uses stamp catalogue prices to investigate the returns on british collectible postage stamps over the period 1900 2008 we find an annualized return on stamps of 7 0 in nominal terms or 2 9 in real terms these returns are higher than those on bonds but below those on equities the volatility of stamp prices approaches that of equities stamp returns are impacted by movements in the equity market but the systematic risk of stamps remains low stamps partially hedge against unanticipated inflation estimates of average after cost returns for individual investors show that stamps may rival equities in terms of realized performance

providing business information to production workers correlates of compensation and profitability this study investigates some of the effects of a company s providing production workers with information on its financial condition productivity and relative standing in the labor market analyzi

a framework for housing market area delineation principles and application a review is presented of the requirements of a framework for the delineation of housing market areas hmas in the context of undertaking a housing market assessment this prompts adoption of a methodology that features an iterative application of information obtained from estate agents to identify hma cores and a functional regionalisation of 2001 census interward migration flows the approach is demonstrated using data for north west england the concluding section explores some implications of the hma framework for policy and future research

art as an investment the market for modern prints repeat sales of modern prints at auction are used to estimate a semiannual index of prices for the period 1977 92 as in other studies of art as an investment prints do not compare favorably to traditional financial assets there is substantial noise in auction prices but little or no support for the proposition that some artists command higher prices in certain countries or that masterpieces outperform the market one puzzle is the continuing tendency for prices realized at certain auction houses to exceed those realized at others notably at sotheby s relative to christie s in new york copyright 1993 by american economic association

concession bargaining the impact on shareholders equity this analysis of bargaining settlements in 1982 83 shows that on average shareholders in those firms that negotiated concessionary settlements enjoyed an 8 to 10 percent increase in the value of their holdings the author interprets this result to mean not that the value of the firm increased but rather that concessions enlarged the shareholders portion of the firm s value at the expense of the workers portion on the other hand concession bargaining does not seem to have reallocated business risk between shareholders and labor finally the evidence suggests that firm specific sources of risk can explain in part not only the magnitude of the concession effects but also the probability that concession bargaining will occur

economic impacts of new unionization on private sector employers 1984 2001 economic impacts of unionization on employers are difficult to estimate in the absence of large representative data on establishments with union status information estimates are also confounded by selection bias because unions could organize at highly profitable enterprises that are more likely to grow and pay higher wages using multiple establishment level data sets that represent establishments that faced organizing drives in the united states during 1984 1999 this paper uses a regression discontinuity design to estimate the impact of unionization on business survival employment output productivity and wages essentially outcomes for employers where unions barely won the election e g by one vote are compared with those where the unions barely lost the analysis finds small impacts on all outcomes that we examine estimates for wages are close to zero the evidence suggests that at least in recent decades the legal mandate that requires the employer to bargain with a certified union has had little economic impact on employers because unions have been somewhat unsuccessful at securing significant wage gains

volatility of price indices for heterogenous goods with applications to the fine art market price indices for heterogeneous goods such as real estate or fine art constitute crucial information for institutional or private investors considering alternative investment decisions in times of financial markets turmoil classical meanvariance analysis of alternative investments has been hampered by the lack of a systematic treatment of volatility in these markets in this paper we propose a hedonic regression framework which explicitly defines an underlying stochastic process for the price index allowing to treat the volatility parameter as the object of interest the model can be estimated using maximum likelihood in combination with the kalman filter we derive theoretical properties of the volatility estimator and show that it outperforms the standard estimator we show that extensions to allow for time varying volatility are straightforward using a local likelihood approach in an application to a large data set of international blue chip artists we show that volatility of the art market although generally lower than that of financial markets has risen after the financial crisis of 2008 09 but sharply decreased during the recent debt crisis

district house price movements in england and wales 1997 2007 an exploratory spatial data analysis approach using exploratory spatial data analysis and house price data from local authority districts in england and wales this article considers whether a regional ripple effect can be tracked at the district level although spatial house price variation has been explored at a sub regional level this is possibly the first paper to attempt to track house price spillover between districts on a national basis high and low growth clusters of areas are traced it is concluded that spatial spillover of house price growth is unlikely to be based on interlocked markets bonded by commuting or migration alone information flows and expectations are likely to reinforce interdistrict transmission specifically house price spillover north of the east midlands appears much more rapid than would be consistent with a ripple suggesting that there is some support for undertaking british housing market analysis on a spatially segmented basis even at a regional level

union rent seeking intangible capital and market value of the firm abstract this study considers the effect of unions on intangi ble capital investment and profitability within the context of a market value rather than a more traditional accounting based approach theory is provided suggesting unions are able to affect profitability by sharing in the economic returns to firm specific intangible capital in support of this hypothesis we find unionization reduces the returns to r d and produces a corresponding limiting influence on r d investment at the firm level i introduction a n extensive literature in economics has ex amined the determinants of profitability with much of the focus centering on the role of market structure only recently however have the effects of labor unions on profitability been analyzed ths is surprising since labor economists long have emphasized union influences on wages and productivity that in turn may affect profitabil ity in recent studies freeman 1983 and karier 1985 report a significant limiting influence of unions on price cost margins in high concentra tion manufacturing industries using firm level data and the market based tobin s

union firm bargaining and the influence of product market power and production technology on systematic risk the relationship between the capm firm beta and the firm s microeconomic decisions is studied by a model under uncertainty which combines the feature of an ex ante inputs substituable production technology and the existence of a union which bargains over various economic dimensions of the firm it is shown that the earlier findings of a relationship between the firm beta the firm product market power and the labor capital ratio may be reinforced through the indirect channel of labor market bargaining but the relationship becomes more complex and heavily depends on the scope of the union firm bargaining process this yields the empirical prediction confirmed for a panel of belgian firms that any proper estimation of the determinants of firm beta must control for firms in the sample being unionized

when unions mattered the impact of strikes on financial markets 1925 1937 this examination of the stock market s responsiveness to strikes looks specifically at strike actions that labor historians generally view as the major ones occurring in the united states in the years 1925 37 the authors find that strikes had large negative effects on industry stock value longer strikes violent strikes strikes in which unions won industry wide strikes strikes that led to union recognition and strikes that led to large wage increases were associated with larger negative share price reactions than were other strikes much of the news generated by the typical strike seems to have been registered by the stock market very early in the strike however there were also some fairly large stock price reactions to news that could be fully revealed only at the end of a strike

the extent of the market examines the classical theory of the market in this paper authors consider the role of price market determination price movement in competitive and monopolistic markets extension of commodity markets

the effect of labor unions on ceo compensation we find evidence that labor unions affect chief executive officer ceo compensation first we find that firms with strong unions pay their ceos less the negative effect is robust to various tests for endogeneity including cross sectional variations and a regression discontinuity design second we find that ceo compensation is curbed before union contract negotiations especially when the compensation is discretionary and the unions have a strong bargaining position third we report that curbing ceo compensation mitigates the chance of a labor strike thus providing a rationale for firms to pay ceos less when facing strong unions

unionization and shareholder interests drawing on agency theory this study examines union nonunion differences in the allocation of both firm profits and business risk to employees and shareholders using a sample of more than 1 000 large private sector firms the authors find that over the period 1970 81 shareholders in unionized firms assumed less of the firm s business risk than shareholders in nonunion firms this finding is interpreted as evidence that managers of unionized firms attempted to minimize agency costs by capitalizing on the incentive effects of risksharing in addition risk adjusted returns to shareholders were lower in unionized firms than in nonunion firms the authors view the relatively poor performance of union firms as a primary motivating factor behind the restructuring of the american industrial relations system during the period studied

unionization and profitability evidence from the capital market this paper examines the effect of unionization on the profitability of firms abnormal monthly common stock returns for a sample of 253 nyse listed firms are estimated for the month in which the union petitions for an election and for the month in which the national labor relations board certifies the election outcome the results suggest that unionization on average is associated with a reduction in equity value when unions win an election the average loss associated with the unionization drive is 3 8 percent of equity value when unions lose an election there is an average net reduction of 1 3 percent in the equity value of the firm

capital labor and the firm a study of german codetermination under the german corporate governance system of codetermination employees are legally allocated control rights over corporate assets through seats on the supervisory board that is the board of nonexecutive directors the supervisory board oversees the management board the board of executive directors approves or rejects its decisions and appoints its members and sets their salaries we empirically investigate the implications of this sort of labor participation in corporate decision making we find that companies with equal representation of employees and shareholders on the supervisory board trade at a 31 stock market discount as compared with companies where employee representatives fill only one third of the supervisory board seats we show that under equal representation management board compensation provides incentives that are not conducive to furthering shareholders interests possibly because labor maximizes a different objective function than shareholders we document that under equal representation companies have longer payrolls than their one third representation peers have finally we provide evidence that shareholders respond to the allocation of control rights to labor by linking supervisory board compensation to firm performance and by leveraging up the firm jel g32 g34

right to work laws new evidence from the stock market 1 introduction business organizations the national right to work committee and organized labor periodically devote enormous resources to battles over passage or repeal of individual state rightto work rtw laws all rtw laws outlaw union shop agreements clauses in collective bargaining agreements that require employees to join the union that represents them and about half also outlaw agency shop agreements clauses in collective bargaining agreements that require nonmembers to pay a fee to the union to cover the cost of representation supporters of rtw argue that employees should not be required to pay dues to a labor organization that they do not support opponents argue that because union contracts and grievance arbitration systems cover all employees members and nonmembers rtw laws encourage free riding by individuals who want to gain the benefits of unionization without bearing the costs and that this weakens labor unions are rtw laws largely symbolic or do they reduce union membership the probability of union growth and union bargaining power informed opinion is still sharply divided one view is that rtw laws reduce the probability of union organizing at least in the years immediately following their passage and that this along with lower levels of membership in previously organized units reduces the level of unionization in a state e g hirsch 1980 carroll 1983 garofalo and malhotra 1992 davis and huston 1993 1995 ellwood and fine 1987 present evidence that the effect on new organizing is most severe with new organizing diminished between 32 and 38 in the 10 years after passage of a rtw law 1 zax and ichniowski 1991 see also ichniowski and zax 1991 demonstrate that the dampening of new organizing extends to the public sector when it operates under rtw laws even when those laws are favorable to unions in other respects others however argue that rtw legislation is largely symbolic it reflects the prevailing anti union opinion climate of a particular state but has little independent impact on union organizing or membership moore and newman 1985 1975 wessels 1981 lumsden and peterson 1975 sobel 1995 presents evidence on the true number of free riders consistent with the taste hypothesis rtw legislation is passed in this perspective in states in which public opinion is anti union and the labor movement is politically weak in these states workers are less attracted to unions and it is this public opinion climate rather than the law itself that hurts union growth 2 we present a new type of evidence on this issue from two states in which public opinion had turned sharply against unions or at least in favor of rtw in the period before the passage of a rtw law we reason that if passage of the rtw law itself actually lowers the probability of unionization or reduces the bargaining power of unions operating within a particular state beyond the effect of the prior shift in attitudes then anticipated future profits of firms operating in that state will rise in response to passage of that law because unions are associated with lower firm profits 3 hence equity values of those firms will increase we use event study methodology to discover whether or not this actually happened in louisiana when it passed a rtw law in 1976 and in idaho when it passed a rtw law in 1985 1986 4 louisiana and idaho are both well suited to research based on the event study technique legislative action in both states took place in the period in which daily stock price data are available from all three sources of stock price data new york american and nasdaq 5 daily as opposed to monthly stock price data are much more likely to reveal statistically significant changes in shareholder equity brown and warner 1985 because we use daily rather than monthly data a finding of no statistically significant change in shareholder equity would be valid evidence that rtw laws are symbolic rather than substantive

buying beauty on prices and returns in the art market this paper investigates the price determinants and investment performance of art we apply a hedonic regression analysis to a new data set of more than one million auction transactions of paintings and works on paper based on the resulting price index we conclude that art has appreciated in value by a moderate 3 97 per year in real u s dollar terms between 1957 and 2007 this is a performance similar to that of corporate bonds at much higher risk a repeat sales regression on a subset of the data demonstrates the robustness of our index next quantile regressions document larger average price appreciations and higher volatilities in more expensive price brackets we also find variation in historical returns across mediums and movements finally we show that measures of high income consumer confidence and art market sentiment predict art price trends this paper was accepted by wei xiong finance

does the political power of nonfinancial stakeholders affect firm values evidence from labor unions whereas corporate political connections are known to enhance equity values we demonstrate that union political activity can have the opposite effect we examine the consequences of a recent australian state law that restricts union political activity but does not change collective bargaining rights in the wake of this law the equity values of affected unionized firms significantly increase and consistent with this market reaction these firms are able to bargain for more favorable labor contracts than their unionized peers in other states the evidence strongly suggests that unions use political activism to extract rents from shareholders and benefit their members

can union labor ever cost less this paper examines the effect of unions on efficiency by estimating cost function systems over three different sets of construction projects the results show that union contractors have greater economies of scale this gives them a cost advantage in large commercial office buildings but in school and hospital construction nonunion contractors have lower costs at all output levels despite the cost differences profits for nonunion contractors in school and hospital construction are no higher than those for union contractors because the burden of higher union costs is shifted to buyers

the economic effect of strikes on the shareholders of nonstruck competitors prior research has established that strikes incur significant economic losses for the struck firms this event study of intraindustry strike effects in highly concentrated industries focuses on two samples firms that experienced a strike involving 1 000 or more workers between 1982 and 1990 and the nonstruck firms that were their closest competitors contrary to the prediction of some models that the economic losses incurred by struck firms are captured by their nonstruck competitors the results indicate that the total spillover from shareholders of the struck firms to shareholders of the nonstruck competitors in this sample was not statistically significant the authors speculate that the struck firms were able to limit spillover effects through such tactics as stockpiling inventory before a strike also concessions by labor which were common outcomes of collective bargaining during the sample period probably significantly reduced the struck firms total strike cost

the effects of unions on research and development an empirical analysis using multi year data a link between unionization and research and development rates research and development expenditures divided by output is tested for in thirteen aggregate canadian industries a balanced panel of thirteen industries covering 1968 to 1986 reveals a negative relationship between industry unionization rates and research and development the results hold when a number of techniques are used to control for unobserved industry heterogeneity and non linear responses to unionization in an industry that moves from the 25th to the 75th percentile of unionization research and development is predicted to fall by about 40 per cent jel classification j51 les effets des syndicats sur l intensite de la recherche et developpement une analyse empirique sur plusieurs annees ce memoire examine le lien entre le degre de syndicalisation et les taux de depenses en recherche et developpement en proportion de la production dans treize industries canadiennes pour ces treize secteurs industriels entre 1968 et 1986 il semble qu il y ait une relation negative entre les taux de syndicalisation et les taux de depenses en recherche et developpement ces resultats sont robustesmeme quand on utilise des techniques pour tenir compte de l heterogeneite des secteurs et des reponses non lineaires a la syndicalisation pour une industrie qui voit son taux de syndicalisation passer du 25e au 75e percentile on prevoit une chute de 40 dans la recherche et developpement

on the rate of return in the art market survey and evaluation abstract existing estimates of rates of return on single art objects and whole collections are surveyed and critically evaluated the psychic benefits from art are in the few cases they are considered at all derived from the difference to financial returns on other markets this paper discusses determinants of psychic benefits and suggests rental fees and willingness to pay studies as a possible way to analyze and estimate the psychic benefits from art

the definition of housing market areas and strategic planning the purpose of this paper is to develop the concept of a housing market area thereby provide insights into our understanding of the sub regional structures of the housing system and hence propose a framework for strategic planning research in the housing market to tackle this task it is first necessary to consider the criteria for a local housing market area the paper begins by reviewing previous definitions by both academics and planners and their underlying assumptions based on the principle of spatial arbitrage a local housing market area is defined by reference to criteria linked to migration self containment parallels are drawn with the principles that have been applied to define a system of spatial labour markets using travel to work areas this spatial arbitrage definition is tested empirically by developing a system of housing market areas for west central scotland using data derived from the land registry finally the paper draws together the empirical findings to discuss the nature of s

term structures of credit spreads with incomplete accounting information we study the implications of imperfect information for term structures of credit spreads on corporate bonds we suppose that bond investors cannot observe the issuer s assets directly and receive instead only periodic and imperfect accounting reports for a setting in which the assets of the firm are a geometric brownian motion until informed equityholders optimally liquidate we derive the conditional distribution of the assets given accounting data and survivorship contrary to the perfect information case there exists a default arrival intensity process that intensity is calculated in terms of the conditional distribution of assets credit yield spreads are characterized in terms of accounting information generalizations are provided

labor protection and leverage this paper exploits inter temporal variations in employment protection across countries and finds that rigidities in labor markets are an important determinant of firms capital structure decisions over the 1985 2007 period we find that reforms increasing employment protection are associated with a 187 basis point reduction in leverage we interpret this finding to suggest that employment protection increases operating leverage crowding out financial leverage this result is robust across measures of employment protection and leverage and does not appear to be due to pre treatment differences between treated and control firms omitted variables unobserved changes in regional economic conditions and reverse causality heterogeneous treatment effects are consistent with our economic intuition we find that the negative effect is more pronounced in firms that are subject to frequent hiring and firing

do highly unionized companies compensate their ceos less in periods of financial distress evidence from canada in this article the author studies the strategic interaction between employee stakeholders in particular labor unions and top management and he evaluates the effect of the two parties inherent competitive rent seeking behavior on ceo pay using a panel of firms listed on the s p tsx composite index the author shows that ceo compensation withstood the financial crisis 2008 2011 despite lower and even negative corporate performance further highly unionized companies were associated with higher ceo pay in terms of non equity elements such as salary and pension allocations the presence of unions had no observed effect in reducing bonuses stock options and restricted stock units these findings have implications for the debate on income inequality and the power of unions to bring about change

the economic consequences of labor unionization evidence from stock price crash risk 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

hedging familiarity and portfolio choice we exploit the restrictions of intertemporal portfolio choice in the presence of non nancial income risk to design and implement tests of hedging that use the information contained in the actual portfolio of the investor we use a unique dataset of swedish investors with information broken down at the investor level and into various components of wealth investor income tax positions and investor demographic characteristics portfolio holdings are identi ed at the stock level we show that investors do not engage in hedging but invest in stocks closely related to their non nancial income we explain this with familiarity that is the tendency to concentrate holdings in stocks with which the investor is familiar in terms of geographical or professional proximity or that he has held for a long period we show that familiarity is not a behavioral bias but is information driven familiarity based investment allows investors to earn higher returns than they would have otherwise earned if they had hedged

how occupied france financed its own exploitation in world war ii can a vanquished country deliver significant resources to its occupier based on the failure of germany to pay its post world war i reparations conventional wisdom generally doubts the possibility yet german reparations represent the exception rather than the rule perhaps the most successful case was the transfer of resources that germany obtained from france during world war ii although they imposed huge payments the victors left the french to decide how to raise the funds after comparing the magnitude of france s payment to other episodes we employ a neoclassical growth model to assess both wartime and postwar policies the burden imposed on the french economy caused it to shrink at a rapid pace curtailing consumption and yielding large debt and money overhangs although vichy france intended to manage the postwar debt burden with higher tax rates the governments following liberation allowed inflation to slash the debt redistributing the adjustment cost higher taxes did not fund the debt but instead paid for expenditures associated with the rise of the welfare state

unionism in a competitive industry this article explores a model in which a union confronts many competitive workers firms and consumers under monopoly unionism union coverage may be incomplete then union wages and employment are insensitive to product demand variation under efficient unionism coverage can never be incomplete some union variables necessarily vary with product demand preliminary evidence on the demand independence under incomplete coverage hypothesis is presented also more structure is imposed and further hypotheses are derived and the manner in which the model can be enriched to allow for a variety of union related issues within a consistent framework is set out

do unions capture monopoly profits this paper challenges the conclusion reached in recent studies that unions reduce profits exclusively in highly concentrated industries from their review of previous studies and their analysis of 1977 data on 367 fortune 500 firms the authors conclude that there is no convincing evidence that concentration produces monopoly profits for unions to capture moreover they find that the union wage effect is not greater in concentrated industries as suggested by the hypothesis that unions capture concentration related profits evidence is found suggesting that a firm s market share its expenditures on research and development and its protection from foreign competition provide more likely sources for union rents than does industry concentration several recent studies have found that unions reduce profits significantly and some have concluded that this profit reduction is restricted to highly concentrated industries both conclusions are important the finding that unions reduce profitability indicates that in general the cost increasing effects of unions outweigh any positive productivity effects they may bring to the workplace such a

the effect of wage bargains on the stock market value of the firm the author estimates the change in the value of common stock resulting from an unexpected change in collectively bargained labor costs using bargaining unit wage data and nyse stock returns he estimates a dollar for dollar trade off between these variables this result is consistent with stock valuations based on present value maximizing managerial decisions that is the results are consistent with hotelling s lemma the author also finds support for the hypothesis that collective bargains maximize the sum of shareholder and union member wealth that is the results are consistent with strong efficiency in the contracting environment copyright 1989 by american economic association

union effects on productivity profits and growth has the long run arrived this article interprets literature examining union effects on economic performance production function studies indicate small overall union impacts on productivity positive effects where they exist appear to result from management response to decreased profit expectations and from a natural selection process lower profitability among unionized firms is well established more interesting is the possibility that unions appropriate quasi rents deriving from long lived tangible and intangible capital the connection between unions investment behavior and productivity growth emerges as a particularly fruitful line of empirical inquiry although it does not encourage a sanguine view of unionism s long run impact

the impact of strikes on shareholder equity from an analysis of data for 1962 82 the authors find that strikes substantially affect shareholder equity as measured by the change in stock prices associated with strikes over that period the a

union certification in ontario its effect on the value of the firm event study methodology is used to determine the effect of union certification in ontario on the expected profitability of firms raid and non raid applications and the method of certification are examined contrary to expectations we find no strong negative response to certification applications in most cases in general the more contentious the certification process the greater the negative abnormal returns this is not only true within ontario but also when our results are compared to those of the u s

the spatial interaction of housing and labour markets commuting flow analysis of north west england the consideration of housing and labour market interaction is a relatively recent development in an academic and policy debate which has traditionally considered home and work in isolation this pa

tiered housing markets and their relationship to labour market areas this paper develops a tiered geography of local housing market areas hmas that provides a national framework for spatial planning it is derived from a theoretical understanding of the economic basis of hmas the analysis explores the relationships between the tiers of the hma geography and local labour market areas drawing on this understanding the empirical research generates sets of different potential geographies of hmas for england based on an algorithm that applies criteria linked to the degree of closure of migration and or commuting patterns a range of theoretically appropriate criteria then enable the different geographies to be assessed the choice of geography is guided by chow tests of statistical differences in standardised house prices in neighbouring hmas derived from hedonic regressions finally conclusions are drawn on the validity of the approach developed the empirical work is on england and datasets drawn from the census and land registry

spatial impacts local labour market characteristics and housing prices this paper takes as a starting point a model where spatial variation in housing prices is explained by urban attraction and labour market accessibility effects using data from a region in south west norway estimation results are found to be encumbered however with significant spatial effects the spatial durbin model is used to account for this and to provide estimates of direct and indirect impacts in addition hypotheses are tested that some of the spatial variation in housing prices reflects local labour market characteristics some support is found for a hypothesis that a model specification should account for sub centres located at some distance from the central parts of the region the indirect impacts estimated in the spatial durbin model suggest that spatially related misspecifications of implicit elasticities in the ordinary least squares model are mainly due to negative externalities close to areas of high labour market accessibility