The Capital Market Response to Wage Negotiations in the Airlines

STEVEN L. THOMAS, DENNIS OFFICER, NANCY BROWN JOHNSON

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

This paper examines the effect of the announcement of various types of airline wage concessions on stock market value. Our results show that capital markets respond positively to wage cuts but not significantly to wage freezes or two‐tier settlements. However, a significant intraindustry spillover effect from two‐tier agreements was found that suggests that concessions by one carrier decreases the value of the remaining carriers. The results also vary by craft, indicating that labor market and institutional characteristics influence market response.

Original languageEnglish
Pages (from-to)203-217
Number of pages15
JournalIndustrial Relations: A Journal of Economy and Society
Volume34
Issue number2
DOIs
StatePublished - Apr 1995

ASJC Scopus subject areas

  • Industrial relations
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation

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