Advance notice labor conflicts and firm value—An event study analysis on Israeli companies

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6 Scopus citations

Abstract

The Israeli law has a special requirement—unions must announce a labor-conflict at least 15 days before a potential strike. This raises the question whether (and how) an advance notice affects the firm value, as it allows employees and employers to negotiate and reach an agreement prior to an actual strike. Using event study analysis, we find in large firms and in companies with relatively high stock liquidity significant negative effect only after the announcement. Smaller firms with relatively illiquid stock exhibit significant negative effect prior to the announcement day, and their post event-day effect is statistically insignificant.

Original languageEnglish
Pages (from-to)410-414
Number of pages5
JournalFinance Research Letters
Volume31
DOIs
StatePublished - 1 Dec 2019

Keywords

  • Event study
  • Firm value
  • Labor conflicts

ASJC Scopus subject areas

  • Finance

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