Does accounting comparability affect corporate employment decision-making?
British Accounting Review, vol.52, no.6, 2020 (SSCI, Scopus)
- Publication Type: Article / Article
- Volume: 52 Issue: 6
- Publication Date: 2020
- Doi Number: 10.1016/j.bar.2020.100937
- Journal Name: British Accounting Review
- Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, International Bibliography of Social Sciences, ABI/INFORM, Business Source Elite, Business Source Premier
- Keywords: Accounting comparability, Corporate governance, Employment decisions, Labour investment efficiency
- Open Archive Collection: Article
- Azerbaijan State University of Economics (UNEC) Affiliated: Yes
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.