Negotiating with Labor under Financial Distress
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Bergman_Negotiating with.pdf
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330.23 KB
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24707ecb4e96ecf7190bc4a7916a0932
Author(s)
Benmelech, Efraim
Bergman, Nittai
Enriquez, Ricardo J.
Date Issued
February 2012
Journal
Review of Corporate Finance Studies
Publisher
Oxford University Press on behalf of The Society for Financial Studies
Citation
Benmelech, E., N. K. Bergman, and R. J. Enriquez. “Negotiating with Labor Under Financial Distress.” Review of Corporate Finance Studies 1, no. 1 (September 1, 2012): 28–67.
Version
Author's final manuscript
Abstract
We analyze how firms renegotiate labor contracts to extract concessions from labor. While anecdotal evidence suggests that firms tend to renegotiate wages downward in times of financial distress, there is no empirical evidence that documents such renegotiation, its determinants, and its magnitude. This article attempts to fill this gap. Using a unique data set of airlines, which includes detailed information on wages and pension plans, we document an empirical link between airline financial distress, pension underfunding, and wage concessions.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1093/rcfs/cfr001
