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Why Strikes Occur: Evidence from the Capital Markets
Author(s) -
Kramer Jonathan K.,
Hyclak Thomas
Publication year - 2002
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/1468-232x.00236
Subject(s) - sample (material) , economics , empirical evidence , stock market , rank (graph theory) , capital market , event study , stock (firearms) , empirical research , econometrics , finance , engineering , mechanical engineering , philosophy , chemistry , context (archaeology) , mathematics , epistemology , chromatography , combinatorics , paleontology , horse , biology
New and existing empirical evidence regarding the stock market reaction to strikes is used to test the validity of three strike theories. A review of the existing capital market evidence reveals the need for information regarding the intraindustry announcement effects of strikes against manufacturing firms. This need is filled by applying event‐study methodology, in a manner consistent with earlier studies, to a sample of strikes during the period 1982–1999. This new evidence, combined with that of previous studies, consistently supports the validity of Hick’s theory that strikes are the result of bargaining errors, misperceptions of bargaining goals, or discrepancies between the expectations of union leaders and the rank and file.