Does Employee Ownership Reduce Strike Risk? Evidence from U.S. Union Elections

55 Pages Posted: 24 Nov 2020

See all articles by Steven Xianglong Chen

Steven Xianglong Chen

University of Liverpool - Management School (ULMS)

Edward Lee

University of Manchester - Alliance Manchester Business School

Konstantinos Stathopoulos

The University of Manchester - Alliance Manchester Business School

Date Written: September 15, 2020

Abstract

This paper investigates the impact of employee stock options (ESO) on labor unions’ likelihood to initiate strikes. Using the unique setting of union elections in U.S. firms, we find that firms offering higher levels of equity incentives to their employees are exposed to significantly lower post-unionization strike risk. Furthermore, firms strategically grant more stock option incentives to employees in response to the unionization of the labor force. The increase in option incentives is more pronounced among firms holding union elections in states with stronger union bargaining power and when the strike risk is perceived to be higher.

Keywords: strike risk, labor union, non-executive stock options, employee ownership, corporate governance

JEL Classification: J51, J52, J53, M52

Suggested Citation

Chen, Steven Xianglong and Lee, Edward and Stathopoulos, Konstantinos, Does Employee Ownership Reduce Strike Risk? Evidence from U.S. Union Elections (September 15, 2020). Available at SSRN: https://ssrn.com/abstract=3708117 or http://dx.doi.org/10.2139/ssrn.3708117

Steven Xianglong Chen

University of Liverpool - Management School (ULMS) ( email )

Chatham Street
Liverpool, L69 7ZH
United Kingdom

Edward Lee

University of Manchester - Alliance Manchester Business School ( email )

Booth St. West (Crawford House)
Manchester, M15 6PB
United Kingdom

Konstantinos Stathopoulos (Contact Author)

The University of Manchester - Alliance Manchester Business School ( email )

AMBS Building
Booth Street West
Manchester, M15 6PB
United Kingdom
+44 161 275 6863 (Phone)
+44 161 275 4023 (Fax)

HOME PAGE: http://www.research.manchester.ac.uk/portal/K.Stathopoulos.html

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