Business, Management and Accounting
4 years ago

Labor unions reduce firm debt, impacting labor-intensive industries.

Journal of Financial Intermediation
Labor unions and corporate financial leverage: The bargaining device versus crowding-out hypotheses
Keegan Woods, Kelvin Jui Keng Tan, Robert W. Faff

Paper Summary

Labor unions in the US affect how much debt companies take on. By looking at data from 1999 to 2013, researchers found that when unions have more power, companies tend to have less debt. This is especially true for companies in industries with lots of labor and unions.

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