The Spillover Effects of Industrial Action on Firm Profitability

Melbourne Institute Working Paper No. 27/97

Date: December 1997


James Ted McDonald
Harry Bloch


While it is generally accepted that industrial action can have a negative impact on a firm's performance, the direct effects of a strike on the affected firm may be only one component of the total impact resulting from the action. The existence of indirect or 'spillover' effects can also have important implications for the economic performance of competing firms. This paper uses a panel dataset of firm-level financial and industrial disputes data on a large sample of firms in Australian manufacturing to determine the extent of direct and spillover effects of industrial action.

Download Paper