The Power of the People: Labor Unions and Corporate Social Responsibility

55 Pages Posted: 12 Jan 2021 Last revised: 25 Jan 2024

See all articles by Amanda Heitz

Amanda Heitz

A.B. Freeman School of Business Tulane University

Youan Wang

The University of Hong Kong

Zigan Wang

Tsinghua University; The University of Hong Kong - School of Economics and Finance; Columbia University

Date Written: December 21, 2021

Abstract

Many policymakers and practitioners argue that corporations may become more stakeholder focused if employees are given more power. We study the causal impact of unionization on stakeholders by analyzing how close labor union elections affect environmental and social (E&S) scores. We find that unionization is associated with an increase in internal social scores that primarily benefit employees and a decrease in external E&S scores that primarily benefit non-employees. The negative effects on external E&S are amplified when firms have greater financial constraints. The effects on both internal and external E&S are magnified when labor unions have more bargaining power. Our results suggest that policymakers consider implications for all stakeholders before implementing policies that prioritize the corporate influence of one stakeholder group.

Keywords: labor union, elections, corporate social responsibility

JEL Classification: J51, D73, M14

Suggested Citation

Heitz, Amanda and WANG, Youan and Wang, Zigan, The Power of the People: Labor Unions and Corporate Social Responsibility (December 21, 2021). Available at SSRN: https://ssrn.com/abstract=3725784 or http://dx.doi.org/10.2139/ssrn.3725784

Amanda Heitz (Contact Author)

A.B. Freeman School of Business Tulane University ( email )

6823 Saint Charles Avenue
New Orleans, LA
United States

Youan WANG

The University of Hong Kong ( email )

Pokfulam Road
Hong Kong
China
59353876 (Phone)

Zigan Wang

Tsinghua University ( email )

Beijing, 100084
China

The University of Hong Kong - School of Economics and Finance ( email )

8th Floor Kennedy Town Centre
23 Belcher's Street
Kennedy Town
Hong Kong

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

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