The impact of labor unionization on monitoring costs

Antonios Chantziaras, Emmanouil Dedoulis and Stergios Leventis

European Management Journal, 2020, vol. 38, issue 2, 288-307

Abstract: This paper analyzes the impact of labor unionization on monitoring costs. Our findings show that monitoring costs are significantly higher for unionized firms. We demonstrate that the more complex, industrial relations structures that characterize unionized firms increase monitoring risks and corporate costs. We further show that monitoring agents consider political ideology supportive to labor unions as a parameter that enhances relevant costs. Additionally, we demonstrate that monitoring costs are lower in the presence of employee share ownership. We conclude that labor unionization increases the costs of monitoring agents, a burden which is amplified or mitigated depending on the structure of industrial relations.

Keywords: Agency costs; Labor unions; Audit pricing; Industrial relations; Labor unionization (search for similar items in EconPapers)
JEL-codes: J50 J51 J53 M4 M41 M42 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eurman:v:38:y:2020:i:2:p:288-307

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DOI: 10.1016/j.emj.2019.09.004

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