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Securities Price Effects Of Unionization Legislation

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  • Vic Naiker
  • Farshid Navissi

Abstract

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 hypothesize 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. 2006 The Southern Finance Association and the Southwestern Finance Association.

Suggested Citation

  • Vic Naiker & Farshid Navissi, 2006. "Securities Price Effects Of Unionization Legislation," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 29(1), pages 63-78.
  • Handle: RePEc:bla:jfnres:v:29:y:2006:i:1:p:63-78
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    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1475-6803.2006.00166.x
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    Cited by:

    1. Cohen, Lee & Cornette, Marcia Millon & Mehran, Hamid & Tehranian, Hassan, 2014. "The effect of state pension cut legislation on bank values," Staff Reports 679, Federal Reserve Bank of New York.

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