Is Public Equity Deadly? Evidence from Workplace Safety and Productivity Tradeoffs in the Coal Industry
We study how ownership structure, in particular public listing status, affects workplace safety and productivity tradeoffs. Theory offers competing hypotheses on how listing related frictions affect these tradeoffs. We exploit detailed asset-level data in the U.S. coal industry and find that workplace safety deteriorates dramatically under public firm ownership, primarily in mines that experience the largest productivity increases. We find evidence consistent with information asymmetry between managers and shareholders of public firms, and ties of private firm ownership with local communities being first-order drivers of workplace safety and productivity tradeoffs.
For their helpful comments and suggestions, we thank Elsa Allman, Zahi Ben-David, Rebecca De Simone, Dave Denis, Scott Guensey, Jon Karpoff, Ed Rice, Philip Strahan, Ren� Stulz, and Michael Weisbach, as well as brownbag, seminar, and conferences participants at Ohio State University, University of Washington, University of Tennessee, the Young Scholars Finance Consortium, and the Financial Markets and Corporate Governance Conference. We are also very grateful to Reza Noorani and Victor Yu at the Mine Safety and Health Administration for gracefully answering our many data requests and questions. Hoa Briscoe-Tran provided excellent research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.