Labor unions and corporate cash holdings: evidence from international data
Tong, Z; Huang, H
Date: 22 May 2018
Journal
Journal of Financial Research
Publisher
Wiley
Publisher DOI
Abstract
Firms in countries with higher union membership have less corporate cash holdings. This negative relation is stronger for firms in countries with weak employment protection legislation, firms in countries with a high degree of labor bargaining centralization, and financially constrained firms. Moreover, the market value of corporate ...
Firms in countries with higher union membership have less corporate cash holdings. This negative relation is stronger for firms in countries with weak employment protection legislation, firms in countries with a high degree of labor bargaining centralization, and financially constrained firms. Moreover, the market value of corporate cash holdings is lower for firms in countries with high union membership. The number of strikes and lockouts is higher in countries with more corporate cash holdings. We conclude that firms strategically choose corporate cash holdings to gain a bargaining position with labor in an international setting.
Finance and Accounting
Faculty of Environment, Science and Economy
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