This study examines whether a firm’s leverage can be used strategically to improve its bargaining position with an organized labor union using samples of non-financial firms listed on the Korean Stock Exchange (KSE) from 1999 to 2013. Through empirical testing, we find that the portfolio with...

This paper identifies an externality of a firm's unionization that affects the capital structure decisions of other, non-unionized firms within a local labor market. We find that union victory in a firm leads non-unionized firms to increase their market leverage ratio by 0.9 to 1.3 percentage...

We examine the empirical relation between labor unions and firm indebtedness in the contemporary United States. Our identification strategy exploits two negative exogenous shocks in union power and the threat of unionization. Further, in the context of panel regressions, we develop a novel...

What is the effect of unionization on corporate financial policies? The average unionized firm responds with lower cash and higher leverage to a unionization election than the average firm escaping unionization. However, using a regression discontinuity design I find that the causal effect of...

High leverage can be used to improve a firm's bargaining position with unions. I show that in the U.S. such use of leverage is concentrated in states without right-to-work (RTW) laws. The use of high leverage by unionized firms in these states is associated with high market-to-book ratios and is...

This paper explores the relationship between creditor rights and employee rights and capital structure across countries. Using country-level creditor rights index and labor rights index as a proxy for agency costs of creditors and agency costs of employees, respectively, I address the agency...

This paper examines the efficacy of carbon tax policies in view of the interactions between such policies and the firm’s carbon efficiency and financing decisions. We show that because the government, unlike capital markets, does not price its policy’s risk by taking into account default...