Unionization, Product Market Competition, and Strategic Disclosure

63 Pages Posted: 15 Jan 2018 Last revised: 2 Feb 2018

Date Written: January 9, 2018

Abstract

We examine the disclosure policies of non-unionized firms operating in unionized industries. We test the hypothesis that non-unionized firms have an incentive to disclose more information when their unionized rivals are engaged in labor renegotiations; that is, to weaken them. We find that non-unionized firms disclose more information and more good news when renegotiations are ongoing. This behavior is stronger for larger firms, firms with fewer peers in the industry, and firms more similar to their renegotiating rivals. We also find some evidence that unionized firms are harmed by this behavior and that non-unionized firms benefit from their increased disclosures.

Keywords: Disclosure, Information Transfer, Labor Unions, Product Market Competition, Proprietary Costs

JEL Classification: M40, M41, J51, J52

Suggested Citation

Aobdia, Daniel and Cheng, Lin, Unionization, Product Market Competition, and Strategic Disclosure (January 9, 2018). Journal of Accounting & Economics (JAE), Forthcoming. Available at SSRN: https://ssrn.com/abstract=3098505

Daniel Aobdia (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2211 Campus Drive
Evanston, IL 60208
United States

Lin Cheng

The University of Arizona - Eller College of Management ( email )

McClelland Hall, Room 301Q
1130 E. Helen Street
Tucson, AZ 85721
United States

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