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The Effects of Automobile Strikes on the Stock Value of Steel Suppliers

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  • Obeua S. Persons

Abstract

This analysis of stock market data for the years 1965–90 indicates that upon announcements of automobile strikes, steel suppliers experienced statistically significant negative returns, about equal to the negative returns experienced by the struck automobile producers. Significantly larger negative interindustry effects were associated with large multi-plant strikes than with smaller one-plant strikes, and the negative effects were significantly greater in the later years of the sample period, a time of relatively weak financial condition, than in the earlier years, a time of stronger financial condition. The author concludes that researchers and policy-makers evaluating the private and social costs of strikes should consider adverse effects on the profitability not only of the struck industries, but also of linked industries, and should take into account the important roles of strike size and industry financial health.

Suggested Citation

  • Obeua S. Persons, 1995. "The Effects of Automobile Strikes on the Stock Value of Steel Suppliers," ILR Review, Cornell University, ILR School, vol. 49(1), pages 78-87, October.
    • Handle: RePEc:sae:ilrrev:v:49:y:1995:i:1:p:78-87
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    Cited by:

    1. John DiNardo & Kevin F. Hallock, 2000. "When Unions "Mattered": Assessing the Impact of Strikes on Financial Markets: 1925-1937," NBER Working Papers 7794, National Bureau of Economic Research, Inc.
    2. William H. Greene & Ana P. Martins, 2002. "Striking Features of the Labor Market," EERI Research Paper Series EERI RP 2002/08, Economics and Econometrics Research Institute (EERI), Brussels.
    3. Shafiq Alvi, 2001. "The impact of strikes on Canadian trade balance," Applied Economics Letters, Taylor & Francis Journals, vol. 8(6), pages 389-396.
    4. 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.
    5. William H. Greene & Ana P. Martins, 2013. "Striking Features of the Labor Market: Theory," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(2), pages 1-24.
    6. Jin Woong Kim & David A. Bessler, 2007. "The causal modelling on equity market innovations: fit or forecast?," Applied Financial Economics, Taylor & Francis Journals, vol. 17(8), pages 635-646.
    7. William H. Greene & Ana P. Martins, 2013. "Striking Features of the Labor Market: Empirical Evidence," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(2), pages 25-53.

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