No abstract

Prior research has established that strikes incur significant economic losses for the struck firms. This event study of intraindustry strike effects in highly concentrated industries focuses on two samples: firms that experienced a strike involving 1,000 or more workers between 1982 and 1990, and the nonstruck firms that were their closest competitors. Contrary to the prediction of some models that the economic losses incurred by struck firms are captured by their nonstruck competitors, the results indicate that the total spillover from shareholders of the struck firms to shareholders of the nonstruck competitors in this sample was not statistically significant. The authors speculate that the struck firms were able to limit spillover effects through such tactics as stockpiling inventory before a strike. Also, concessions by labor, which were common outcomes of collective bargaining during the sample period, probably significantly reduced the struck firms' total strike cost.

In recent years, increasing international merger and acquisition activity has captured the attention of not only the business press but also of academia and policymakers. The effects of this 'mergermania' are felt by many (i.e. managers, stockholders, regulators, and consumers), and the dollar amounts are significant. However, little has been done to find out the financial characteristics of the US and foreign firms participating in the cross-border merger and acquisition activity. The main objective of this study is to gain a better understanding of the characteristics of firms involved in the international market for corporate control. To meet this objective, the firm-specific financial variables of both foreign companies and US companies have been investigated and the effect that these variables have on the probability of a successful acquisition has been assessed. In addition, despite the fact that foreign acquisitions of US firms have outnumbered US acquisitions overseas, it is thought relevant to look into the financial characteristics of US companies acquiring foreign companies. This gives a more complete picture of the cross-border takeover phenomenon. Under the assumption that the goal of corporate managers is the maximization of shareholders' wealth, analysis is conducted within the neoclassical theoretical framework of maximization of the value of the firm. If the acquisition of a US company is a project with a net present value (NPV) larger than zero, then there is an increase in the shareholders' wealth of the acquiring company. Thus, financial variables were chosen on the basis of their hypothesized effect on value using the NPV criterion. It was found that six out the eight financial variables studied affect the NPV measure in the predicted direction.

New and existing empirical evidence regarding the stock market reaction to strikes is used to test the validity of three strike theories. A review of the existing capital market evidence reveals the need for information regarding the intraindustry announcement effects of strikes against manufacturing firms. This need is filled by applying event-study methodology, in a manner consistent with earlier studies, to a sample of strikes during the period 1982-1999. This new evidence, combined with that of previous studies, consistently supports the validity of Hick's theory that strikes are the result of bargaining errors, misperceptions of bargaining goals, or discrepancies between the expectations of union leaders and the rank and file.A CONSIDERABLE EFFORT HAS BEEN GIVEN TO EMPIRICAL STUDIES OF THE DETERMINANTS of labor disputes. Unfortunately, even the most careful econometric analyses have difficulty in discriminating between alternative hypotheses regarding the causes of strikes. This is so because the variables available in most data sets can serve only as imperfect proxies for the variables hypothesized to influence the probability of strikes, with the result that estimated relationships often may be interpreted in ways that are consistent with more than one theoretical framework. Studies of the stock market response to labor disputes provide more promising 80 The authors' affiliations are, respectively, Kutztown University of Pennsylvania and Lehigh University.

In this paper, equity and cross-subsidization issues associated with the congestion pricing scheme proposed as part of New York City's PlaNYC are examined, as are initial usage patterns, user income distribution, and revenue distribution. We find that equity concerns surrounding the proposal are supported by economic analysis. If New York City is to revisit congestion pricing in the future and make it more politically palatable, it will need to find a way to mitigate these equity concerns.