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Unions and Profitability: A Meta-Analysis

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Author Info
Chris Doucouliagos () (Deakin University)
Patrice Laroche () (University of Nancy 2)

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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.

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File URL: http://www.deakin.edu.au/buslaw/aef/workingpapers/papers/2007_01eco.pdf
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Publisher Info
Paper provided by Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance in its series Economics Series with number 2007_01.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 32 pages
Date of creation: 10 Oct 2007
Date of revision:
Handle: RePEc:dkn:econwp:eco_2007_01

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  14. Voos, Paula B & Mishel, Lawrence R, 1986. "The Union Impact on Profits in the Supermarket Industry," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 513-17, August. [Downloadable!] (restricted)
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    Other versions:
  24. Haskel, Jonathan & Martin, Christopher & Small, Ian, 1995. "Price, Marginal Cost and the Business Cycle," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 25-41, February.
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    Other versions:
  27. Clark, Kim B, 1984. "Unionization and Firm Performance: The Impact on Profits, Growth, and Productivity," American Economic Review, American Economic Association, vol. 74(5), pages 893-919, December. [Downloadable!] (restricted)
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