Do Labor Unions Always Lead to Underinvestment?

2016 ◽  
Vol 29 (1) ◽  
pp. 45-66 ◽  
Author(s):  
Hyungjin Cho ◽  
Bryan Byung-Hee Lee ◽  
Woo-Jong Lee ◽  
Byungcherl Charlie Sohn
Keyword(s):  
Labor Unions ◽  
Labor Union ◽  
Agency Problems ◽  
Investment Efficiency ◽  
Minority Shareholders ◽  
Firm Level ◽  
Negative Relation ◽  
Level Data ◽  
Firm Level Data ◽  
Jel Classifications

ABSTRACT We examine the relation between labor union strength and investment efficiency using the comprehensive firm-level data of Korean-listed companies. We find that the perceived underinvestment related to unionization documented in previous studies is attributable to a negative relation between union strength and investment in overinvesting firms. In fact, union strength is positively related to the level of investment in underinvesting firms. We further find that the relation between union strength and investment efficiency is more pronounced for chaebol firms where inefficient investments are more likely due to greater agency problems between the controlling and minority shareholders. Finally, we document that the investment has more positive value implications in firms with a stronger union. Our results suggest that unions play an important role as a nonfinancial stakeholder in curbing inefficient investments. JEL Classifications: G30; G31; J53; J54; M41; M54.

scholarly journals Growth Opportunities Utilization: Debt Overhang or Asymmetric Information?

2021 ◽  
Vol 13 (1) ◽  
pp. 171-182
Author(s):  
S. Martono ◽  
Arief Yulianto ◽  
Angga Pandu Wijaya
Keyword(s):  
Asymmetric Information ◽  
Agency Problems ◽  
Annual Reports ◽  
Discretionary Power ◽  
Growth Opportunities ◽  
Firm Level ◽  
Debt Overhang ◽  
Level Data ◽  
Firm Level Data ◽  
The Impact

Abstract Inter-industry has various capital structures to take advantage of growth opportunities due to agency differences and information asymmetric problems. This research aims to analyze: (1) the differences in leverage between industries and (2) the impact of shareholders–debtholders conflict and information asymmetric on growth opportunities. The firm-level data used is extracted from Indonesia Stock Exchange's annual reports from 2008 to 2019. Authors used the analysis of variance (ANOVA). The findings show differences in leverage between industries. However, they are relatively stable and not excessive for assets to prevent conflicts between managers and shareholders with debtholders. Equity is also not used to utilize growth to reduce the discretionary power (dilution) of shareholders. As a result, the use of opportunities and growth is limited. This study identifies agency problems and asymmetric information that determines independent companies' decisions in exploiting growth opportunities.

Ageing and Employability. Evidence from Belgian Firm-Level Data

2012 ◽  
Author(s):  
Mariann Rigo ◽  
Vincent Vandenberghe ◽  
Fábio Waltenberg
Keyword(s):  
Firm Level ◽  
Level Data ◽  
Firm Level Data

scholarly journals Who Really Benefits from Consumption Tax Cuts? Evidence from a Large VAT Reform in France

2019 ◽  
Vol 11 (1) ◽  
pp. 38-63 ◽  
Author(s):  
Youssef Benzarti ◽  
Dorian Carloni
Keyword(s):  
Value Added ◽  
Consumption Tax ◽  
Difference In Differences ◽  
Firm Level ◽  
Employment Effects ◽  
Level Data ◽  
Price Effects ◽  
Firm Level Data ◽  
Material Goods ◽  
Firm Owners

This paper evaluates the incidence of a large cut in value-added taxes (VATs) for French sit-down restaurants in 2009. In contrast to previous studies, which only focus on the price effects of VAT reforms, we estimate the effects of the VAT cut on four groups: workers, firm owners, consumers, and suppliers of material goods. Using a difference-in-differences strategy on firm-level data, we find that: firm owners pocketed more than 55 percent of the VAT cut; consumers, sellers of material goods, and employees shared the remaining windfall with consumers benefiting the least; and the employment effects were limited. (JEL H22, H25, L83)

Multinational Banks and IMF Conditionality

2021 ◽  
Author(s):  
Trung A Dang ◽  
Randall W Stone
Keyword(s):  
Political Economy ◽  
Investment Decisions ◽  
Location Decisions ◽  
Preferential Treatment ◽  
Firm Level ◽  
Financial Firms ◽  
Level Data ◽  
Firm Level Data ◽  
Imf Programs ◽  
Investment Location

Abstract We find firm-level evidence that US banks receive preferential treatment in countries under IMF conditionality. We rely on investment location decisions to infer firms’ expectations about future profits and find that US firms are approximately 53 percent more likely to acquire financial firms in countries under financial conditionality. IMF programs without financial conditionality and FDI in other sectors serve as placebo tests. Financial conditionality has weak effects on investment decisions by non-US firms, which implies a political-economy interpretation. Firm-level data indicate that the distinctive behavior of US firms is not due to advantages of scale or to a US-firm fixed effect, but to US influence in the IMF. Firms from other major IMF shareholders benefit as well, but the effects are much weaker. The effects are concentrated in the politically relevant firms that have local affiliates, which is consistent with the interpretation that firms lobby for preferential treatment.

Bribery, export decisions, and institutional constraints: Evidence from cross-country firm-level data

2021 ◽  
Vol 69 ◽  
pp. 585-612
Author(s):  
Le Thanh Ha ◽  
To Trung Thanh ◽  
Doan Ngoc Thang ◽  
Pham Thi Hoang Anh
Keyword(s):  
Institutional Constraints ◽  
Firm Level ◽  
Export Decisions ◽  
Level Data ◽  
Firm Level Data ◽  
Cross Country
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