Chen, Kacperczyk, and Ortiz-Molina (2007)

Chen, Huafeng (Jason), Kacperczyk, Marcin T. and Ortiz-Molina, Hernan, "Do Non-Financial Stakeholders Affect Agency Costs of Debt? Evidence from Unionized Workers." Working paper, March 2007.

From the authors' abstract:  "We study the impact of...unionized workers – on the pricing of corporate debt. Firms in more unionized industries have lower bond yields. This relation is stronger in firms with weaker financial conditions and cannot be explained by the correlation of unionization with industry characteristics, governance mechanisms, or financial leverage. Firms in unionized industries implement less risky investment policies, and are less likely targets of acquisitions...  Hence, unions are viewed favorably in the bond market because, through their influence on corporate affairs, they protect bondholders’ wealth."