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- Title
Right-to-Work Laws and Financial Leverage.
- Authors
Marciukaityte, Dalia
- Abstract
High leverage can be used to improve a firm's bargaining position with unions. I find that this use of leverage in the United States is concentrated in states without right-to-work (RTW) laws. The use of high leverage by unionized firms in these states is associated with high market-to-book ratios and is more likely when shareholder and manager interests are aligned through compensation contracts. I confirm these findings by examining the adoption of RTW laws in Oklahoma, as well as presidential and congressional elections. Moreover, I confirm the importance of RTW laws using cash balances instead of leverage.
- Subjects
UNITED States; RIGHT-to-work laws; FINANCIAL leverage; COLLECTIVE bargaining; LABOR organizing; NATIONAL Labor Relations Act (U.S.); STOCKHOLDERS
- Publication
Financial Management (Wiley-Blackwell), 2015, Vol 44, Issue 1, p147
- ISSN
0046-3892
- Publication type
Article
- DOI
10.1111/fima.12065