Authors: Antonios Chantziaras, Emmanouil Dedoulis, Stergios Leventis

Title: The impact of labour unionisation on monitoring costs

Abstract

This paper analyses the impact of labour unionisation on monitoring costs. We consider audit pricing to be a well‑specified monitoring cost incurred by the principal. Our findings show that monitoring costs are significantly higher fees to firms with organised labour. We demonstrate that unionised firms have more complex structures which increase monitoring risks and costs. We further show that monitoring agents consider political ideology supportive to labour unions which further enhances relevant costs. Additionally, we demonstrate that monitoring costs are significantly lower in the presence of employee share ownership. We conclude that labour unionisation increases the costs of monitoring agents; a burden which is then further amplified or mitigated based on the structure of industrial relations.