Workshop Series: Jared Stanfield
Prior research has established a relationship between unionization and firm value and strategic behavior. In this study, we find that the political power of unions is an important mechanism in this relationship. We utilize a recent law change which bans union (and corporate) political contributions, but leaves the ability of unions to collectively bargain unchanged, in New South Wales, Australia. We find that unionized firms affected by this law significantly increased in value and negotiated more favorable labor contracts relative to their unionized peers in other states. We also find corroborating evidence in the United States around Citizens United. We propose that unionized labor uses political contributions to increase its ability to extract rents from shareholders.
Jared Stanfield is a Senior Lecturer in the School of Banking and Finance at University of New South Wales. Jared received his PhD from the University of Washington in 2011. His research interests are in corporate finance, labor and finance, mergers and acquisitions, and political economy.