Does accounting comparability affect corporate employment decision-making?
Does accounting comparability affect corporate employment decision-making?
This paper investigates whether accounting comparability affects corporate employment decision-making. We find that firms with greater accounting comparability experience a lower degree of inefficiency in labour investments. Further, our results show that accounting comparability affects labour investments via improved external monitoring and internal governance mechanisms. Additional analyses indicate that our findings are not driven by non-labour investments and are robust to alternative explanations and endogeneity concerns. Collectively, the results are consistent with the view that comparability is an effective monitoring tool, which mitigates agency conflict and thereby reduces opportunistic employment decision-making.
Accounting comparability, Corporate governance, Employment decisions, Labour investment efficiency
Zhang, Zhuang
df7b9fa8-04fd-4085-b74d-c9c1506b974e
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Zhang, Qingjing
af719b43-b76c-4d0e-ad41-ff58ebbc505d
Elmagrhi, Mohamed
d90d0532-fbc6-4b77-8872-0b8aea213e75
November 2020
Zhang, Zhuang
df7b9fa8-04fd-4085-b74d-c9c1506b974e
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Zhang, Qingjing
af719b43-b76c-4d0e-ad41-ff58ebbc505d
Elmagrhi, Mohamed
d90d0532-fbc6-4b77-8872-0b8aea213e75
Zhang, Zhuang, Ntim, Collins, Zhang, Qingjing and Elmagrhi, Mohamed
(2020)
Does accounting comparability affect corporate employment decision-making?
British Accounting Review, 52 (6), [100937].
(doi:10.1016/j.bar.2020.100937).
Abstract
This paper investigates whether accounting comparability affects corporate employment decision-making. We find that firms with greater accounting comparability experience a lower degree of inefficiency in labour investments. Further, our results show that accounting comparability affects labour investments via improved external monitoring and internal governance mechanisms. Additional analyses indicate that our findings are not driven by non-labour investments and are robust to alternative explanations and endogeneity concerns. Collectively, the results are consistent with the view that comparability is an effective monitoring tool, which mitigates agency conflict and thereby reduces opportunistic employment decision-making.
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Accepted/In Press date: 14 July 2020
e-pub ahead of print date: 6 August 2020
Published date: November 2020
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Publisher Copyright:
© 2020 British Accounting Association
Keywords:
Accounting comparability, Corporate governance, Employment decisions, Labour investment efficiency
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Local EPrints ID: 442842
URI: http://eprints.soton.ac.uk/id/eprint/442842
ISSN: 0890-8389
PURE UUID: ae8c203d-7765-42fb-96e9-7f9ffb3b783b
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Date deposited: 28 Jul 2020 16:52
Last modified: 17 Mar 2024 05:45
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Author:
Mohamed Elmagrhi
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