IDEAS home Printed from https://ideas.repec.org/a/sae/ilrrev/v55y2002i2p219-233.html
   My bibliography  Save this article

When Unions “Mattered†: The Impact of Strikes on Financial Markets, 1925–1937

Author

Listed:
  • John Dinardo
  • Kevin F. Hallock

Abstract

This examination of the Stock Market's responsiveness to strikes looks specifically at strike actions that labor historians generally view as the major ones occurring in the United States in the years 1925–37. The authors find that strikes had large, negative effects on industry stock value. Longer strikes, violent strikes, strikes in which unions “won,†industry-wide strikes, strikes that led to union recognition, and strikes that led to large wage increases were associated with larger negative share price reactions than were other strikes. Much of the “news†generated by the typical strike seems to have been registered by the Stock Market very early in the strike. However, there were also some fairly large stock price reactions to news that could be fully revealed only at the end of a strike.

Suggested Citation

  • John Dinardo & Kevin F. Hallock, 2002. "When Unions “Mattered†: The Impact of Strikes on Financial Markets, 1925–1937," ILR Review, Cornell University, ILR School, vol. 55(2), pages 219-233, January.
    • Handle: RePEc:sae:ilrrev:v:55:y:2002:i:2:p:219-233
    DOI: 10.1177/001979390205500202
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/001979390205500202
    Download Restriction: no
    File URL: https://libkey.io/10.1177/001979390205500202?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
    ---><---

    References listed on IDEAS

    as
    1. Nelson, Morton & Amoako-Adu, Ben & Smith, Brian, 1994. "Impact of labor strikes on equity values: Canadian evidence," Journal of Economics and Business, Elsevier, vol. 46(3), pages 153-165, August.
    2. Card, David & Olson, Craig A, 1995. "Bargaining Power, Strike Durations, and Wage Outcomes: An Analysis of Strikes in the 1880s," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 32-61, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Henry S Farber & Daniel Herbst & Ilyana Kuziemko & Suresh Naidu, 2021. "Unions and Inequality over the Twentieth Century: New Evidence from Survey Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1325-1385.
    2. 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).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Molinder, Jakob & Karlsson, Tobias & Enflo, Kerstin, 2022. "Social democracy and the decline of strikes," Explorations in Economic History, Elsevier, vol. 83(C).
    2. Geraghty, Thomas M. & Wiseman, Thomas, 2008. "Wage strikes in 1880s America: A test of the war of attrition model," Explorations in Economic History, Elsevier, vol. 45(4), pages 303-326, September.
    3. Silviano Esteve Pérez & Mariluz Marco Aledo & María Engracia Rochina Barrachina, 2006. "A Competing Risks Analysis of Strike Duration in Spain: Agreement and Non-Agreement Outcomes," Revista de Economía Laboral - Spanish Journal of Labour Economics, Asociación Española de Economía Laboral - AEET, vol. 3, pages 14-45.
    4. Emre Ünal & Nezir Köse, 2018. "The impact of workdays lost to strikes on wage growth in Turkey," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 7(1), pages 1-19, December.
    5. Card, David & Olson, Craig A, 1995. "Bargaining Power, Strike Durations, and Wage Outcomes: An Analysis of Strikes in the 1880s," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 32-61, January.
    6. Cynthia L. Gramm & John F. Schnell, 1994. "Some Empirical Effects Of Using Permanent Striker Replacements," Contemporary Economic Policy, Western Economic Association International, vol. 12(3), pages 122-133, July.
    7. 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.
    8. Sadat Reza & Paul Rilstone, 2016. "Semiparametric Efficiency Bounds and Efficient Estimation of Discrete Duration Models with Unspecified Hazard Rate," Econometric Reviews, Taylor & Francis Journals, vol. 35(5), pages 693-726, May.
    9. Peter Cramton & Morley Gunderson & Joseph Tracy, 1999. "The Effect Of Collective Bargaining Legislation On Strikes And Wages," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 475-487, August.
    10. Michele Campolieti, 2023. "An event study analysis of the effects of collective bargaining legislation on strike outcomes," LABOUR, CEIS, vol. 37(2), pages 242-279, June.
    11. John Kallas, 2023. "Retooling militancy: Labour revitalization and fixed‐duration strikes," British Journal of Industrial Relations, London School of Economics, vol. 61(1), pages 68-88, March.
    12. Randolph Sloof & Frans van Winden, 2000. "Show Them Your Teeth First!," Public Choice, Springer, vol. 104(1), pages 81-120, July.
    13. Alexandre Mas, 2008. "Labour Unrest and the Quality of Production: Evidence from the Construction Equipment Resale Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(1), pages 229-258.
    14. Aricieri Devidé Júnior & José Raimundo Carvalho, 2016. "Strike Duration After Collective Bargaining Legislation Changes: A Reappraisal Of The 1988 Brazilian New Federal Constitution With Better Micro Data," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 231, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    15. Mauleon, Ana & Vannetelbosch, Vincent, 2004. "Bargaining with endogenous deadlines," Journal of Economic Behavior & Organization, Elsevier, vol. 54(3), pages 321-335, July.
    16. Nicole Jonker & Hans van Ophem & Joop Hartog, 2006. "Dual track or academic route for auditors: does it matter?," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 1019-1035.
    17. Susan Wolcott, 2008. "Strikes in Colonial India, 1921–1938," ILR Review, Cornell University, ILR School, vol. 61(4), pages 460-484, July.
    18. Nicole Jonker & Hans van Ophem & Joop Hartog, 2002. "Dual Track or Academic Route for Auditors," Tinbergen Institute Discussion Papers 02-121/4, Tinbergen Institute.
    19. Robert Hanrahan & Joseph Kushner & Felice Martinello & Isidore Masse, 1997. "The effect of work stoppages on the value of firms in Canada," Review of Financial Economics, John Wiley & Sons, vol. 6(2), pages 151-166.
    20. Bhattacharjee, A. & Samarjit Das, 2002. "Testing Proportionality in Duration Models with Respect to Continuous Covariates," Cambridge Working Papers in Economics 0220, Faculty of Economics, University of Cambridge.

    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:55:y:2002:i:2:p:219-233. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.