How Labor Unions Affect Corporate Environmental and Social Voluntary Disclosures: Theory and Evidence
Youan Wang  1@  , Zhige Yu  1@  
1 : Xiamen University

In the dynamic field of corporate governance, it is essential to understandunderstanding how labor unions and management interact, particularly in relation to environmental and social (E&S) disclosures, is essential. Although considerable research has been conducted on the influence of unions on corporate policies, there remains a lack of clarity about their specific effectsthe specific effects of unions on E&S disclosures remain unclear. Our study addresses this gap by examining the impact of labor bargaining dynamics and information hierarchy preferences on these disclosures. We utilize a theoretical framework alongside a regression discontinuity design (RDD) with union election data in our empirical analysis. Our findings indicate that union presence is inversely related to environmental disclosures and subtly alters social disclosure practices, influenced by the bargaining power of unions and the financial conditions of firms. Additionally, we discover that strategic actions by unions during elections can lower a firm's implied cost of capital. These insights contribute to a deeper understanding of the intricate dynamics influencing corporate transparency in the face of internal stakeholder pressures and may be useful for policy-makers or firm managers seeking to promote attention to E&S issues.


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