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The power of the people: labor unions and corporate social responsibility

Author

Listed:
  • Amanda Heitz
  • Youan Wang
  • Zigan Wang

Abstract

Many policymakers and practitioners argue that corporations may become more stakeholder focused if employees are given more power. We study the causal impact of unionization on stakeholders by analyzing how close labor union elections affect environmental and social (E&S) scores. We find that unionization is associated with an increase in internal social scores that primarily benefit employees and a decrease in external E&S scores that primarily benefit non-employees. The negative effects on external E&S are amplified when firms have greater financial constraints. The effects on both internal and external E&S are magnified when labor unions have more bargaining power. Our results suggest that policymakers consider implications for all stakeholders before implementing policies that prioritize the corporate influence of one stakeholder group.

Suggested Citation

  • Amanda Heitz & Youan Wang & Zigan Wang, 2024. "The power of the people: labor unions and corporate social responsibility," Review of Finance, European Finance Association, vol. 28(6), pages 1833-1879.
    • Handle: RePEc:oup:revfin:v:28:y:2024:i:6:p:1833-1879.
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    File URL: http://hdl.handle.net/10.1093/rof/rfae018
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    More about this item

    Keywords

    labor union; elections; corporate social responsibility;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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