Labor Unions and Income Smoothing

• 成果类型: Article
• 署名作者: Hamm, Sophia J. W.; Jung, Boochun; Lee, Woo-Jong
• 署名单位: University System of Ohio; Ohio State University; University of Hawaii System; University of Hawaii Manoa; Seoul National University (SNU)
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12321
• 发表日期: 2018
• 页码: 1201-1228
• 关键词: real activities manipulation; research-and-development; earnings management; corporate governance; debt; CONTRACTS; equity; COSTS; pay; COMPENSATION

摘要

We study labor unions, an important stakeholder group that has not been a focus of the earnings smoothing literature. We posit that managers strike a balance between sheltering resources from employees' profit sharing demands and catering to employees' aversion to downside risk by smoothing earnings. We then hypothesize that a strong labor union would intensify managerial incentives to smooth earnings. Consistent with our hypothesis, we find that union strength is positively associated with earnings smoothing activities through management of both accruals and R&D expenditures.