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Unions and profitability: a meta-analysis

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  • Doucouliagos, Chris
  • Laroche, Patrice

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.

Suggested Citation

  • Doucouliagos, Chris & Laroche, Patrice, 2007. "Unions and profitability: a meta-analysis," Working Papers eco_2007_01, Deakin University, Department of Economics.
  • Handle: RePEc:dkn:econwp:eco_2007_01
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