The Effect of Unionization on Industry Merger Activity Around Negative Economy-Wide Shocks

37 Pages Posted: 8 Jan 2019 Last revised: 25 May 2021

See all articles by Evrim Akdoğu

Evrim Akdoğu

Sabanci University

Nihat Aktas

WHU - Otto Beisheim School of Management

Serif Aziz Simsir

Sabanci University

Date Written: April 10, 2021

Abstract

We investigate the effect of labor unionization on industry-level takeover activity after negative economy-wide shocks. Focusing on the 2008 financial crisis, we find that merger intensities drop significantly during the post-crisis period, though the degree of unionization in an industry attenuates this negative effect. Our analyses of the 2001 and 1990 economic recessions lead to similar results. While unionization is known to deter M&A activity on average, our results indicate that in dire times, when firm survival is at risk, unions appear to resist relatively less to restructuring activities in the form of mergers.

Keywords: Mergers and Acquisitions, Labor Unions, 2008 Financial Crisis, Merger Waves

JEL Classification: G34

Suggested Citation

Akdoğu, Evrim and Aktas, Nihat and Simsir, Serif Aziz, The Effect of Unionization on Industry Merger Activity Around Negative Economy-Wide Shocks (April 10, 2021). International Review of Financial Analysis, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3306317 or http://dx.doi.org/10.2139/ssrn.3306317

Evrim Akdoğu

Sabanci University ( email )

Istanbul
Turkey

Nihat Aktas

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Serif Aziz Simsir (Contact Author)

Sabanci University ( email )

Sabanci Business School
Istanbul, Orhanli, 34956 Tuzla
Turkey

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