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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.

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  • 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
    DOI: 10.1111/j.1468-232X.2008.00549.x
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    Cited by:

    1. Carla Haelermans & Lex Borghans, 2012. "Wage Effects of On-the-Job Training: A Meta-Analysis," British Journal of Industrial Relations, London School of Economics, vol. 50(3), pages 502-528, September.
    2. José Allouche & Patrice Laroche & Florent Noël, 2008. "Restructurations et performances de l’entreprise:une méta-analyse," Revue Finance Contrôle Stratégie, revues.org, vol. 11(2), pages 105-146, June.
    3. Fernando Rios-Avila, 2017. "Unions and Economic Performance in Developing Countries: Case Studies from Latin America," Revista Ecos de Economía, Universidad EAFIT, vol. 21(44), pages 4-36, June.
    4. Benoît Mahy & François Rycx & Mélanie Volral, 2011. "Does Wage Dispersion Make All Firms Productive?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 58(4), pages 455-489, September.
    5. Fahn, Matthias, 2011. "Three Essays on Commitment and Information Problems," Munich Dissertations in Economics 13750, University of Munich, Department of Economics.
    6. Hristos Doucouliagos & T. D. Stanley, 2009. "Publication Selection Bias in Minimum‐Wage Research? A Meta‐Regression Analysis," British Journal of Industrial Relations, London School of Economics, vol. 47(2), pages 406-428, June.
    7. Hristos Doucouliagos & Patrice Laroche, 2009. "Unions and Profits: A meta-regression Analysis," Post-Print hal-00648569, HAL.

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