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Union Concessions following Asset Sales and Takeovers
Journal article   Peer reviewed

Union Concessions following Asset Sales and Takeovers

Erik Lie and Tingting Que
Journal of financial and quantitative analysis, Vol.54(1), pp.393-424
02/01/2019
DOI: 10.1017/S0022109018000522

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Abstract

We document that the likelihood of asset sales increases with union presence and union wages. Furthermore, acquiring firms gain significant concessions from the incumbent union following asset sales. Finally, the anticipation of union concessions helps explain the excess stock returns around asset sale announcements. We find no comparable effects for takeovers. We conclude that asset sales, but not takeovers, are partially motivated by the potential to extract concessions from unions.
Business & Economics Business, Finance Economics Social Sciences

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