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Mergers and unionization: Roll together or clash?

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Listed:
  • Ge, Qi
  • Kim, Donggeun
  • Kim, Myongjin
  • Yoon, Jangsu

Abstract

This paper explores the interplay between mergers and unionism and disentangles their product market impacts by analyzing concurrent merger and unionization episodes in the U.S. airline industry. We find that unionization alone reduces service quality and increases airfare, while a concurrent merger mitigates the negative quality impact and lowers airfare. The interaction effects between mergers and unionization are non-monotonic and time-varying and may improve consumer surplus in the long run. Our theoretical framework accounts for the lengthy merger process and provides a potential explanation. Our findings present a novel perspective on reconciling previous merger studies and offer important policy implications.

Suggested Citation

  • Ge, Qi & Kim, Donggeun & Kim, Myongjin & Yoon, Jangsu, 2025. "Mergers and unionization: Roll together or clash?," International Journal of Industrial Organization, Elsevier, vol. 103(PB).
    • Handle: RePEc:eee:indorg:v:103:y:2025:i:pb:s016771872500075x
    DOI: 10.1016/j.ijindorg.2025.103209
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    Keywords

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    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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