Do labor unions enhance corporate social performance? Evidence from Korean financial markets


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This study examines the impact of labor unionization on corporate social responsibility (CSR) in South Korean listed companies, particularly in the context of chaebol-affiliated firms. Using a dataset of 2,622 firm-year observations between 2005 and 2009, the study employs regression analyses to explore the relationship between unionization and CSR performance. Key findings indicate a significant negative correlation between labor unionization and CSR engagement, suggesting that unionized firms exhibit less involvement in CSR activities. This association, however, is not significant in chaebol-affiliated firms, where the unique corporate structure and shared resources appear to mitigate the influence of labor unions on CSR. Furthermore, the study reveals a positive link between CSR initiatives and labor productivity in unionized firms, indicating that CSR may enhance employee efficiency. The study highlights the intricate relationships between labor unionization, corporate governance, and CSR, particularly in the context of Korean business conglomerates. It emphasizes the importance of aligning labor interests with CSR commitments and underscores the role of effective corporate governance in promoting CSR activities. The positive impact of CSR on labor productivity underscores its potential in boosting employee performance.

This work was supported by the Gachon University research fund of 2023. (GCU-202303770001).

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  • JEL Classification (Paper profile tab)
    M10, M14, G30
  • References
  • Tables
  • Figures
    • Table 1. Descriptive statistics
    • Table 2. Labor union and CSR
    • Table 3. 2SLS regressions
    • Table 4. Unionization and CSR for chaebol versus non-chaebol firms
    • Table 5. Entrenchment effect in chaebol firms
    • Table 6. CSR and labor productivity in unionized versus non-unionized firms
    • Table A1. Correlation matrix
    • Conceptualization
      Ilhang Shin, Sorah Park
    • Data curation
      Ilhang Shin
    • Formal Analysis
      Ilhang Shin
    • Investigation
      Ilhang Shin
    • Methodology
      Ilhang Shin
    • Project administration
      Ilhang Shin, Sorah Park
    • Supervision
      Ilhang Shin, Sorah Park
    • Validation
      Ilhang Shin, Sorah Park
    • Visualization
      Ilhang Shin, Sorah Park
    • Writing – original draft
      Sorah Park