Local Religiosity Culture and Managerial Response to Organized Labor

ABSTRACT We provide evidence that local religiosity affects collective bargaining outcomes between firms and unions. Drawing on social norms theory and social identity theory, we hypothesize that religiosity is negatively associated with industrial action. Our findings support the latter explanation, where we find stronger effects when the likelihood of shared identity is higher. Analyses of negotiated outcomes following union shareholder activism mitigate concerns that employee preferences alone drive these results. Further evidence indicates that higher local religiosity reduces firms' use of strategic mechanisms designed to enhance management's leverage over unions, highlighting the broader role of cultural context in shaping management–labor interactions.