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    Rights statement: This is the author’s version of a work that was accepted for publication in Journal of Corporate Finance. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Corporate Finance, 66, 2021 DOI: 10.1016/j.jcorpfin.2020.101816

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    Embargo ends: 7/06/22

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

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Article number101816
<mark>Journal publication date</mark>1/02/2021
<mark>Journal</mark>Journal of Corporate Finance
Volume66
Number of pages20
Publication StatusPublished
Early online date7/12/20
<mark>Original language</mark>English

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.

Bibliographic note

This is the author’s version of a work that was accepted for publication in Journal of Corporate Finance. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Corporate Finance, 66, 2021 DOI: 10.1016/j.jcorpfin.2020.101816