Unions and Profitability: A Meta-Analysis

32 Pages Posted: 13 Sep 2007  

Hristos Doucouliagos

Deakin University - School of Accounting, Economics and Finance

Patrice Laroche

University of Lorraine - Institut d'Administration des Entreprises; ESCP Europe

Date Written: 2007

Abstract

The effect of unions on profits continues to be an unresolved empirical issue. In this paper, meta-regression analysis is applied to the population of 45 econometric studies that report 532 estimates of the direct effect of unions on profits. We show that unions have a significant negative effect on profits, and that this effect is larger in the US. Separate meta-regression analysis is used to identify the sources of union-profit effects. Meta-analysis of 239 estimates of unions interacted with the hypothesized sources of union rents reveals that neither the market power nor the quasi-rent appropriation theories are supported by the extant studies. Analysis of the between-study heterogeneity reveals that unions have an indirect effect on factor accumulation - they depress physical capital formation and stimulate advertising expenditure. There is a clear need for additional primary research in this area.

Keywords: Unions, profits, meta-analysis

JEL Classification: J5

Suggested Citation

Doucouliagos, Hristos and Laroche, Patrice, Unions and Profitability: A Meta-Analysis (2007). Available at SSRN: https://ssrn.com/abstract=1014306 or http://dx.doi.org/10.2139/ssrn.1014306

Chris (Hristos) Doucouliagos (Contact Author)

Deakin University - School of Accounting, Economics and Finance ( email )

Burwood, Victoria 3215
Australia

Patrice Laroche

University of Lorraine - Institut d'Administration des Entreprises ( email )

Nancy
France

ESCP Europe ( email )

79, avenue de la République
Paris, 75011
France

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