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4. Relative LiteratureUnlike Campello et al. (2016), Chen et al. (2012) report a positive correlation between unionization and debt cost in the findings of their exploration. This conflicts with the assumed correlation between unionization and borrowing costs later reported by Campello et al. (2016). Another good example of a related paper which measures the influence of labor unions on bondholders in bankruptcy states is the study by Blaylock et al. (2015). In response to the 2008 financial crisis, the U.S. Government engaged itself in the restructuring process of the distressed non-financial firm Chrysler LLC (Chrysler) and its campaign to ensure  that jobs are preserved  under the the labor union UAW. In their investigation, Blaylock et al. (2015) assess the Chrysler bankruptcy because of the intensity of the Government interference in the relations between banks as well as other secured creditors and organized labor forces. The main priority was to measure and show how Government interference in bankruptcy proceedings on behalf of labor influenced the relations between companies with a strong labor forces and their debtholders. In their statistical investigation, Blaylock et al. used a sample size of 406 homogeneously situated firms with traded bonds in order to measure the fluctuations in bond prices surrounding the major happenings of the Chrysler Company bankruptcy. As a repercussion of the interference from the government, companies belong to industries with more unionized firms were more liable to lower event-window abnormal bond returns, higher abnormal bond yields, and lower cumulative abnormal bond returns. These findings appeared to be more potent for companies approaching the state of distress. Additionally, the trend also appeared to be potent in cases where the companies in question exhibited stronger labor bargaining powers and had significantly larger pension liabilities. Generally, the evidence demonstrates that the governmental interference is indeed a significant factor that contributes towards widening the gap between creditor and worker relations.  Unlike the study conducted by Chen et al. (2012), the instigators reported a wider relationship gap between between creditors and the organized labor force, especially with the events surrounding the Chrysler bankruptcy. This would of course result in a decline in the benefits associated with a strongly unionized industry on a firm’s borrowing costs. Such a case would have a larger impact on distressed firms. Moreover, Blaylock et al. (2015) reported a high negative creditor reaction in response to the government’s engagement in the labor campaign surrounding the Chrysler Company bankruptcy. These outcomes are well aligned with the results obtained by Campello et al. (2016). Nevertheless, the study conducted by Campello et. al (2016) does not factor in governmental interference and other related actions.The study by DiNardo and Lee (2004) investigates the impact of worker unionization on firms’ profitability, survival rates and default risk by using a similar regression discontinuity design. In the study, the authors focused on companies that faced union elections in the United States during the period between 1984–1999. The study verified the findings of Campello et al. (2016) which found no significant proof supporting the claim that close union winners respond poorly, becoming more and more probable in entering the state of distress, or that they have a higher probability of filing for bankruptcy as opposed to close union losersMoreover, the statistical sampling conducted by Campello et al. (2016) focuses on the complication of information pertaining to the effect of unionization on the price fluctuation of unsecured bonds of large public firms. This poses are as contradiction to yet another study carried out by Campello et al. (2016), from the literature that assess the extensive effects that unions have on the operations of small or private firms.Conclusion The main goal of this paper was to determine the impact of labor unions on bondholders’ wealth in bankruptcy states. It is clear that despite the declining prominence of labor unions in the United States, labor unions are still very significant and can manipulate their credibility in order to work against other creditors like bondholders. Therefore, the exploration is focus is on impact of labor unions in the United States while drawing examples of impact of labor unions in european countries such as Germany and France.The exploration of the study conducted by Campello et al. (2016) has demonstrated that elevated bankruptcy costs can be attributed to union election victories, which in turn result increased losses for bondholders due to decreased bond values. Additionally, Campello et al demonstrate that unionization tends to elevate bankruptcy costs, prolong the bankruptcy procedures, and  to convolute the way unionized workers’ rights are assigned. The study shows that these trends are acknowledged by creditors, who in turn factor the necessary prices into the firms’ funding costs.  In their exploration of the means through which unionized labor affects bond values, the instigators discovered that while unionization is associated with increases in bankruptcy costs, there are no clear variations in the likelihood of bankruptcy. Therefore, its is evident that the impact of unionization on bond values is more significant for firms under financial distress, firms with underfunded pension plans, and those in regions where unions are deemed to be better funded (non-RTW states).Nonetheless, the generalisation of these results is subject to certain limitations. For instance, the results obtained are limited in the measure of the influence of labor force unionization on the price of bonds of large and public firms in the last four decades. Furthermore, the RDD method, through the study was conducted aims at differentiating the narrow gap of distinctions between closely won and closely lost elections. Additionally, the hypothesise outlined refer only to companies that had union election after 1976 and are able to access bond markets. Therefore, these findings are not applicable to union elections won by large margins, to votes conducted in small or private firms, or to firms that do not observe votes for unionization in their plants after 1970s. Furthermore, the results of this study are aimed solely to address how one firm’s stakeholder (bondholders) reacted to a perceived change in the riskiness of their claims. The financial consequences induced by several strikes executed by the German Train Drivers’ Union has shown that labor unions have a significant economic impact ranging from other corporate stakeholder to the whole of society. Therefore, the influence of labor unions to other stakeholders such as on customers, suppliers and the state would also be interesting.Taking these limitations into consideration, the results obtained are useful for both researchers as well as policymakers because they make it easier to comprehend how a company’s labor force influences corporate access to credit. Moreover, the results make the study of the impact of labor unions in bankruptcy proceedings more comprehensible. Through the implementing of Right-to-work laws in some U.S. States are shown that policy makers can limit the influence of labor unions

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