By exploiting the local randomness in close-call labor elections, the authors find a positive impact of labor unionization on firms’ real earnings management, suggesting the pressure effect of increased labor power. In a local regression discontinuity (RD) analysis, firms that narrowly pass...

Using firm-level union membership data for the period of 2002–2016, we show that firms with higher union membership are more likely to engage in real earnings management than accrual-based earnings management, with abnormal production as the dominant form of real earnings management. We...

Trade unions are often argued to cause allocative inefficiencies and to lower welfare. We analyze whether this evaluation is also justified in a Cournot-oligopoly with free but costly entry. If input markets are competitive and output per firm declines with the number of firms (business...