Conclusion labor unions are still very significant and

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