Investment and union certification

Using data on union certification elections, we estimate the impact of unio nization on firms' investment behavior. Employing both a standard q model a nd an "investment surprises" technique, we find that union certification si gnificantly reduces investment in the year following the election. We find that a winning certification election has, on average, about the same effec t on investment in the year following the event as would- given the elastic ity measures taken from the public finance literature-a 33 percentage-point increase in the corporate tax. The magnitude of the response in years furt her away from the election is less certain.