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Type: Journal article
Title: The agency cost effects of unionization on firm value
Author: Naicker, V.
Navissi, F.
Sridharan, V.G.
Citation: Journal of Management Accounting Research, 2008; 20(1):133-152
Publisher: American Accounting Association
Issue Date: 2008
ISSN: 1049-2127
Editor: Luft, J.
Statement of
Vic Naiker, Farshid Navissi, VG Sridharan
Abstract: Using a sample of 99 New Zealand stock exchange-listed firms, we employ agency framework and strategy typology to examine whether the introduction of unionization legislation affects the value of prospector firms more negatively than defender firms. The results from this examination indicate that firms characterized by strategy of higher Growth-Diversity and Innovation-Risk experience greater loss in value. We attribute the results tot he higher agency costs associated with the strategies adopted by prospector firms. The results hold after controlling for variables such as size, industry membership, labour intensity, and proportion of unionized workers.
Keywords: Abnormal returns; unionization; agency costs; firm strategy
Rights: © American Accounting Association
DOI: 10.2308/jmar.2008.20.1.133
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