This paper presents a method for testing whether the volume of strike activity in a unionized firm or industry is affected by the cost of such activity as measured by output lost, and applies that method to Canadian data at the one-digit SIC level. Output losses are estimated through bivariate transfer function analysis of time series data, and rank correlations between these estimates and a measure of strike activity are then calculated across industries. The results support the hypothesis that strike activity varies inversely with the cost of strikes, but this evidence is not strong, possibly due to the small sample size used in the cross-section analysis.
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