Articles

Organized labor and information asymmetry in the financial markets

G. HILARY

Review of Accounting Studies

décembre 2006, vol. 11, n°4, pp.525-548

Départements : Comptabilité et Contrôle de Gestion

http://ssrn.com/abstract=889001


Prior results from the labor relations literature suggest that revealing information weakens management's position in collective bargaining. Thus, when facing organized labor, management has an incentive to preserve the information asymmetry with outsiders. This study uses a sample from a large cross-section of the economy over several years to test this relation. Results are consistent with this prediction. Strong organized labor is associated with higher bid-ask spreads, higher probability of informed trading, lower trading volume and lower analyst coverage. These relations hold after controlling for numerous factors such as growth opportunities or risk. Author Keywords: information asymmetry; labor relation KeyWords Plus: BID-ASK SPREADS; DIFFERENTIAL INFORMATION; CORPORATE DISCLOSURE; ACCOUNTING METHOD; EXECUTION COSTS; TRADING VOLUME; UNIONIZATION; STOCK; DECISIONS; POLICY


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