IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v41y1995i8p1267-1278.html
   My bibliography  Save this article

Union-Firm Bargaining and the Influence of Product Market Power and Production Technology on Systematic Risk

Author

Listed:
  • Jacques Bughin

    (McKinsey & Company, 175 Bloor Street East, Toronto, Ontario, Canada M4W 3R8 and Free University of Brussels, Department of Economics, Roosevelt Avenue, 50, Brussels, 1050, Belgium)

Abstract

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.

Suggested Citation

  • Jacques Bughin, 1995. "Union-Firm Bargaining and the Influence of Product Market Power and Production Technology on Systematic Risk," Management Science, INFORMS, vol. 41(8), pages 1267-1278, August.
    • Handle: RePEc:inm:ormnsc:v:41:y:1995:i:8:p:1267-1278
    DOI: 10.1287/mnsc.41.8.1267
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.41.8.1267
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.41.8.1267?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jin, Li & Merton, Robert C. & Bodie, Zvi, 2006. "Do a firm's equity returns reflect the risk of its pension plan?," Journal of Financial Economics, Elsevier, vol. 81(1), pages 1-26, July.
    2. Brett W. Myers & Alessio Saretto, 2016. "Does Capital Structure Affect the Behavior of Nonfinancial Stakeholders? An Empirical Investigation into Leverage and Union Strikes," Management Science, INFORMS, vol. 62(11), pages 3235-3253, November.
    3. Bughin, J., 1999. "Oligopoly profit-sharing contracts and the firm's systematic risk1," European Economic Review, Elsevier, vol. 43(3), pages 549-558, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:41:y:1995:i:8:p:1267-1278. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.