IDEAS home Printed from https://ideas.repec.org/a/sae/ilrrev/v39y1986i3p425-438.html
   My bibliography  Save this article

The Impact of Strikes on Shareholder Equity

Author

Listed:
  • Brian E. Becker
  • Craig A. Olson

Abstract

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 average strike involving 1,000 or more workers resulted in a 4.1 percent drop in shareholder equity, representing a decline of $72–87 million in 1980 dollars. Costs varied widely across industries. The authors also find that capital markets are usually able to anticipate whether an impending contract deadline will result in a strike or settlement. In the prestrike period, however, the stock market consistently underestimates the cost of a strike to shareholders, as evidenced by the fact that nearly two-thirds of the total decline in returns (2.7 percent) occurs after the strike is announced.

Suggested Citation

  • Brian E. Becker & Craig A. Olson, 1986. "The Impact of Strikes on Shareholder Equity," ILR Review, Cornell University, ILR School, vol. 39(3), pages 425-438, April.
    • Handle: RePEc:sae:ilrrev:v:39:y:1986:i:3:p:425-438
    as

    Download full text from publisher

    File URL: http://ilr.sagepub.com/content/39/3/425.abstract
    Download Restriction: no
    ---><---

    Citations

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


    Cited by:

    1. François Belot & Timothée Waxin, 2017. "Labor Conflicts in French Workplaces: Does (the Type of) Family Control Matter?," Journal of Business Ethics, Springer, vol. 146(3), pages 591-617, December.
    2. David S. Lee & Alexandre Mas, 2012. "Long-Run Impacts of Unions on Firms: New Evidence from Financial Markets, 1961--1999," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 333-378.
    3. Ben-Nasr, Hamdi & Ghouma, Hatem, 2018. "Employee welfare and stock price crash risk," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 700-725.
    4. John M. Abowd & George T. Milkovich & John M. Hannon, 1990. "The Effects of Human Resource Management Decisions on Shareholder Value," ILR Review, Cornell University, ILR School, vol. 43(3), pages 203-2-236-, April.
    5. Shafiq Alvi, 2001. "The impact of strikes on Canadian trade balance," Applied Economics Letters, Taylor & Francis Journals, vol. 8(6), pages 389-396.
    6. Tomasz Piotr Wisniewski & Brendan John Lambe & Alexandra Dias, 2020. "The Influence of General Strikes against Government on Stock Market Behavior," Scottish Journal of Political Economy, Scottish Economic Society, vol. 67(1), pages 72-99, February.
    7. Lin, Carl, 2012. "Less Myth, More Measurement: Decomposing Excess Returns from the 1989 Minimum Wage Hike," IZA Discussion Papers 6269, Institute of Labor Economics (IZA).
    8. Lin, Carl, 2011. "Give Me Your Wired and Your Highly Skilled: Measuring the Impact of Immigration Policy on Employers and Shareholders," IZA Discussion Papers 5754, Institute for the Study of Labor (IZA).
    9. Hanrahan, Robert & Kushner, Joseph & Martinello, Felice & Masse, Isidore, 1997. "The effect of work stoppages on the value of firms in Canada," Review of Financial Economics, Elsevier, vol. 6(2), pages 151-166.
    10. David G. Meyer & William N. Cooke, 1993. "US Labour Relations in Transition: Emerging Strategies and Company Performance," British Journal of Industrial Relations, London School of Economics, vol. 31(4), pages 531-552, December.
    11. Chen, Tsung-Kang & Chen, Yan-Shing & Liao, Hsien-Hsing, 2011. "Labor unions, bargaining power and corporate bond yield spreads: Structural credit model perspectives," Journal of Banking & Finance, Elsevier, vol. 35(8), pages 2084-2098, August.
    12. Martin B. Schmidt & David J. Berri, 2004. "The Impact of Labor Strikes on Consumer Demand: An Application to Professional Sports," American Economic Review, American Economic Association, vol. 94(1), pages 344-357, March.
    13. Afik, Zvika & Haim, Roi & Lahav, Yaron, 2019. "Advance notice labor conflicts and firm value—An event study analysis on Israeli companies," Finance Research Letters, Elsevier, vol. 31(C).
    14. Lin, Carl, 2011. "Give Me Your Wired and Your Highly Skilled: Measuring the Impact of Immigration Policy on Employers and Shareholders," IZA Discussion Papers 5754, Institute of Labor Economics (IZA).

    More about this item

    Statistics

    Access and download statistics

    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:sae:ilrrev:v:39:y:1986:i:3:p:425-438. 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: SAGE Publications (email available below). General contact details of provider: http://www.ilr.cornell.edu .

    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.