Institutional Investors and Mispricing of Unionized Firms

45 Pages Posted: 4 Mar 2021 Last revised: 21 Mar 2023

See all articles by Viktoriya Lantushenko

Viktoriya Lantushenko

Saint Joseph's University

Dalia Marciukaityte

Illinois State University

Samuel H. Szewczyk

Drexel University - Department of Finance

Date Written: May 27, 2021

Abstract

We examine investment by different types of institutional investors in firms with strong labor unions. We find that hedge funds own a lower percentage of shares in these firms than in other firms. On the other hand, passive institutional investors and institutional investors as a group own a higher percentage. Our tests suggest that the relation between unionization and hedge fund ownership is causal: when union power changes in a firm, hedge fund ownership changes in the opposite direction. Instead, passive investor holdings in unionized firms seem to be driven by other firm characteristics.

Keywords: Institutional investors, Hedge funds, Passive investors, Labor unions, Labor laws, Stock performance

JEL Classification: G14, G23, G38

Suggested Citation

Lantushenko, Viktoriya and Marciukaityte, Dalia and Szewczyk, Samuel H., Institutional Investors and Mispricing of Unionized Firms (May 27, 2021). Available at SSRN: https://ssrn.com/abstract=3763564 or http://dx.doi.org/10.2139/ssrn.3763564

Viktoriya Lantushenko

Saint Joseph's University ( email )

5600 City Avenue,
Philadelphia, PA 19131
United States

Dalia Marciukaityte (Contact Author)

Illinois State University ( email )

Normal, IL 61790
United States

Samuel H. Szewczyk

Drexel University - Department of Finance ( email )

LeBow College of Business
Philadelphia, PA 19104
United States
215-895-1746 (Phone)

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