The Effects of Airline Strikes on Struck and Nonstruck Carriers

Fusco, Richard A.; Fuess, Scott M.

doi:10.1177/001979399104400210

Cited by 18 publications

(17 citation statements)

References 29 publications

(7 reference statements)

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“…As the results in Table 2 indicate, the announcement of a strike, on average, imposed statistically significant negative excess returns on the struck firms. These results are consistent with the findings of Neumann (1980), Becker andOlson (1986), andDeFusco andFuess (1991), who concluded that while strikes are somewhat foreseeable, investors do not have perfect foresight and the announcement of a strike is an important event.…”

Section: Resultssupporting

confidence: 91%

“…Studies of the stock market response to labor disputes provide more promising empirical tests of alternative strike theories. Prior research has provided evidence of the effects of strikes on the shareholders of struck firms (Neumann 1980;Becker and Olson 1986;Becker 1987;Abowd 1989), their suppliers (Persons 1995), and their competitors (DeFusco and Fuess 1991;Kramer and Vasconcellos 1996). This article presents new information regarding the intraindustry effects of strike announcements and examines what the results from this and previous studies on the shareholder wealth effects of strikes say about various strike theories.…”

mentioning

confidence: 89%

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Why Strikes Occur: Evidence from the Capital Markets

Kramer

Hyclak

2002

Industrial Relations

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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.

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Section: Resultssupporting

confidence: 91%

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confidence: 89%

Why Strikes Occur: Evidence from the Capital Markets

Kramer

Hyclak

2002

Industrial Relations

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“…As Table 1 shows, the average total strike cost for the struck firms turned out to be only slightly negative (-.48%), and it was statistically nonsignificant at the .10 level.8 7Use of this measure of total strike cost is consistent with the approaches taken by Becker and Olson (1986) and DeFusco and Fuess (1991). 8Becker and Olson (1986) reported total strike costs averaging -3.50% for the sample drawn from January 1963 through May 1975, declining to -2.66% for the period May 1975 through December 1982.…”

Section: Total Cost To Shareholdersmentioning

confidence: 53%

The Economic Effect of Strikes on the Shareholders of Nonstruck Competitors

Kramer¹,

Vasconcellos²

1996

ILR Review

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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.

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“…Several studies in labor economics provide systematic evidence that strikes have a negative impact on productivity (McHugh 1991), product quality (Krueger and Mas 2004), industry value (Becker andOlson 1986, DeFusco andFuess 1991;Neumann 1980), and stock valuations (Dinardo and Hallock (2002). Several studies in labor economics provide systematic evidence that strikes have a negative impact on productivity (McHugh 1991), product quality (Krueger and Mas 2004), industry value (Becker andOlson 1986, DeFusco andFuess 1991;Neumann 1980), and stock valuations (Dinardo and Hallock (2002).…”

Section: The Problem Of Workers For Authoritarian Regimesmentioning

confidence: 99%

Coopting Workers under Dictatorship

Kim

Gandhi²

2010

The Journal of Politics

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What explains the variance in how authoritarian regimes treat labor? We advance a theory of why and how some dictatorships coopt workers using nominally democratic institutions, such as legislatures and political parties. When dictatorships need cooperation from society and face a potentially strong opposition, they attempt to coopt workers to reinforce their bases of support. As instruments of cooptation, legislatures and parties are useful in facilitating a political exchange between regimes and labor: dictatorships provide material benefits to workers in exchange for labor's quiescence. As a result, institutionalized dictatorships provide more benefits to workers and experience lower levels of labor protest than their noninstitutionalized counterparts. We find empirical support for these hypotheses from a sample of all dictatorships from the 1946-96 period

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The Effects of Airline Strikes on Struck and Nonstruck Carriers

Cited by 18 publications

References 29 publications

Why Strikes Occur: Evidence from the Capital Markets

Why Strikes Occur: Evidence from the Capital Markets

The Economic Effect of Strikes on the Shareholders of Nonstruck Competitors

Coopting Workers under Dictatorship

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