Do analysts improve labor investment efficiency?

Lee, Kyung Yun; Mo, Kyoungwon

doi:10.1016/j.jcae.2020.100213

Cited by 24 publications

(12 citation statements)

References 14 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Our channel analysis reveals that mitigating agency conflicts and information asymmetry is vital for media coverage to improve a firm's labor investment efficiency. In doing so, we extend prior studies that examine a range of internal and external governance determinants of labor investment efficiency, including information quality (Jung et al 2014), institutional investment horizons (Ghaly et al 2020), analyst following (Lee and Mo 2020), equity compensation (Sualihu et al 2021) and stock liquidity (Ee et al 2022).…”

Section: Introductionmentioning

confidence: 83%

“…2021) can mitigate suboptimal labor investment arising from information asymmetry and agency problems. From the perspective of external forces, analysts' following (Lee and Mo 2020), short‐selling (Ding et al . 2020), institutional investors' horizons (Ghaly et al .…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…2014), institutional investment horizons (Ghaly et al . 2020), analyst following (Lee and Mo 2020), equity compensation (Sualihu et al . 2021) and stock liquidity (Ee et al .…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Media Coverage and Labor Investment Efficiency: Evidence from China*

Liu

Wang

2023

Asia-Pac J of Fin Stud

View full text Add to dashboard Cite

Using 2.09 million pieces of media coverage associated with Chinese firms during 2006–2019, we find a significantly positive relationship between media coverage and labor investment efficiency. Both newspaper and online media coverage can effectively reduce firms' labor over‐investment and under‐investment. Our results are robust after addressing a range of endogeneity concerns. Further analyses show that the positive relationship between media coverage and labor investment efficiency is more pronounced for firms with higher labor cost stickiness or when human capital is more important to the firm's business model. Mechanism analyses reveal that media coverage improves labor investment efficiency through the compensation incentive mechanism, supervision mechanism, and information disclosure mechanism.

show abstract

Section: Introductionmentioning

confidence: 83%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

See 1 more Smart Citation

Media Coverage and Labor Investment Efficiency: Evidence from China*

Liu

Wang

2023

Asia-Pac J of Fin Stud

View full text Add to dashboard Cite

show abstract

“…Second, our research follows the path of the burgeoning number of studies that provide evidence on the determinants of labor investment efficiency. Previous studies focus mainly on firm‐level characteristics, such as financial report quality (Jung et al, 2014), CEO–director ties (Khedmati et al, 2019), stock price informativeness (Ben‐Nasr & Alshwer, 2016), CSR (Cao & Rees, 2020), analyst coverage (Lee & Mo, 2020), CEO overconfidence (Lai et al, 2020), institutional investors' horizons (Ghaly et al, 2020), accounting comparability (Zhang et al, 2020), competitive threats (Boubaker et al, 2021), equity compensation (Sualihu et al, 2021), and shareholder litigation rights (Do & Le, 2021) in a single country. Beyond these studies, our knowledge regarding a broader range of countries is limited.…”

Section: Introductionmentioning

confidence: 99%

“…Previous studies reveal that information asymmetry plays a pivotal role in shaping labor investment inefficiency(Ben-Nasr & Alshwer, 2016;Lee & Mo, 2020). Accordingly, we include two additional variables to control for accounting quality, namely, Accrual and Forecast dispersion.…”

mentioning

confidence: 99%

Corporate governance and labor investment efficiency: International evidence from board reforms

Tran

2022

Corporate Governance

View full text Add to dashboard Cite

Research Question/Issue: This study investigates whether and how board reforms affect labor investment efficiency using a difference-in-differences analysis of board reforms in 41 countries worldwide as an exogenous shock.Research Findings/Insights: Board reforms are positively associated with labor investment efficiency because they benefit firms in reducing over-hiring, under-firing, under-hiring, and over-firing. Further, we show that the positive effect is more pronounced among firms with lower board independence before the reforms, firms with high institutional foreign ownership, firms with higher corporate social responsibility (CSR), and labor-intensive firms. While countries with rule-based reforms experience a greater reduction in abnormal net hiring post-reform, the effects of reforms are similar across civil and common law countries. Further analyses reveal that in countries with higher employment protection legislation, the beneficial relationship between board reforms and labor investment efficiency is weaker.Theoretical/Academic Implications: Our study suggests that one of the mechanisms linking board reforms and labor investment efficiency is a reduction in frictions, such as moral hazard and adverse selection, which hamper efficient labor investment. To the best of our knowledge, this is the first international study that explores globally the relationship between board reforms and firm labor policies, in particular, labor investment efficiency.Practitioner/Policy Implications: Given the importance of identifying and confirming the role of corporate governance in human capital investment efficiency, our empirical investigation provides useful insights and policy implications for managers in building efficient labor policies.

show abstract