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Are Strikes Less Effective in Conglomerate Firms?

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  • David C. Rose

Abstract

The author develops an extension of the Ashenfelter-Johnson model of union wage bargaining to account for how diversification can improve a firm's ability to take strikes and therefore reduce wage settlements. To test the model, a wage equation is derived that is conditioned on the occurrence of a strike and is then estimated using union wage settlement data for 15 manufacturing firms covering contract settlements from 1954 to 1988. The estimation results support organized labor's contention that conglomerate firms enjoy a significant bargaining advantage over labor unions.

Suggested Citation

  • David C. Rose, 1991. "Are Strikes Less Effective in Conglomerate Firms?," ILR Review, Cornell University, ILR School, vol. 45(1), pages 131-144, October.
    • Handle: RePEc:sae:ilrrev:v:45:y:1991:i:1:p:131-144
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    Cited by:

    1. Kim, Jeong-Bon & Zhang, Eliza Xia & Zhong, Kai, 2021. "Does unionization affect the manager–shareholder conflict? Evidence from firm-specific stock price crash risk," Journal of Corporate Finance, Elsevier, vol. 69(C).
    2. Sheng-Syan Chen & Yan-Shing Chen & Yanzhi Wang, 2015. "Does Labor Power Affect the Likelihood of a Share Repurchase?," Financial Management, Financial Management Association International, vol. 44(3), pages 623-653, September.
    3. Bartholomew Armah & James Peoples, 1997. "Foreign Corporate Acquisition Activity Domestic Union Status in the U.S," International Economic Journal, Taylor & Francis Journals, vol. 11(3), pages 103-115.
    4. USHIJIMA Tatsuo, 2016. "Corporate Diversification, Employee Bargaining Power, and Wages," Discussion papers 16103, Research Institute of Economy, Trade and Industry (RIETI).
    5. Duygun, Meryem & Huang, Bihong & Qian, Xiaolin & Tam, Lewis H.K., 2018. "Corporate pension plans and investment choices: Bargaining or conforming?," Journal of Corporate Finance, Elsevier, vol. 50(C), pages 519-537.

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