Securities Price Effects of Unionization Legislation

Posted: 26 Jan 2005

See all articles by Vic Naiker

Vic Naiker

University of Melbourne - Faculty of Business and Economics

Farshid Navissi

Monash University


Prior studies document that firms experience negative stock price effects in response to unionization. We study the economic effects of a radical change in unionization legislation in New Zealand, and conjecture that the stock price effect of unionization is a function of prior unionization status of firms. We provide evidence that legislative events that increase the likelihood of introducing more stringent legislation do not affect stock prices of high-unionized firms, whereas low-unionized firms are affected negatively and significantly. Legislative events that signal less stringent unionization legislation result in significant stock price increases for all firms.

Keywords: unionization, firm valuation

JEL Classification: G14, G38, J51, L51

Suggested Citation

Naiker, Vic and Navissi, Farshid, Securities Price Effects of Unionization Legislation. Available at SSRN:

Vic Naiker

University of Melbourne - Faculty of Business and Economics ( email )

198 Berkeley Street
Melbourne, Victoria, 3010

Farshid Navissi (Contact Author)

Monash University ( email )

Building H, Caulfield Campus
Melbourne, Victoria 3142 Vic 3145
+61 405 664941 (Phone)

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