The Effect of Changes in Firm Diversification on Union Wage Settlements for 15 Major U. S. Industrial Firms

摘要: A well known argument is that conglomerate firms may exploit their ability to cross-subsidize price wars for the purpose of engaging in predatory pricing.' similar advanced by organized labor can often outlast unions during strikes because they strike costs indefinitely [1; 15; 17]. This cross-subsidizing costs, argues, greatly reduces effectiveness striking as a bargaining weapon, resulting lower wage settlements union. Another fear articulated conglomerates simply eliminate divisions with troublesome unions. Since this threat perceived most credible it further increase power firm [19]. While opportunity or clearly exists many conglomerates, there no empirical evidence engage these activities enjoy [12; 15].' paper tests proposition diversification efforts lead settlements. Unlike earlier studies examine effect firm's nature on levels, examines how recent changes level affect The remainder outlined follows. In section I several key aspects labor's are discussed and formal testable hypothesis proposed. Section II proposes simple test hypothesis. III discusses data construction variables. IV reports interprets results regressions. V concludes paper.