Financial Transparency, Labor Productivity, and Real Wages

Journal of International Accounting Research (forthcoming)

46 Pages Posted: 1 Feb 2021 Last revised: 19 Apr 2023

See all articles by Nargess Golshan

Nargess Golshan

Indiana University - Kelley School of Business - Department of Accounting

Inder K. Khurana

University of Missouri at Columbia - Robert J. Trulaske, Sr. College of Business

Felipe Bastos G. Silva

University of Missouri, Columbia

Multiple version iconThere are 2 versions of this paper

Date Written: April 19, 2003

Abstract

Financial transparency can affect labor markets directly by mitigating information asymmetries and optimizing the matching of heterogeneous firms and employees (matching efficiency channel) and indirectly through the effect of transparency on firms’ capital inputs (capital utilization channel). Exploiting the increase in financial transparency following the mandatory IFRS adoption by European Union countries, we perform a battery of tests that indicate subsequent increases in labor productivity and real wages for manufacturing industries in member countries. More importantly, we find evidence that both channels are economically relevant in explaining gains in labor productivity and real wages following the mandatory IFRS adoption. Collectively, our results underscore that the benefits of an increase in transparency go beyond the effects on capital markets and corporate investments, with implications for the allocation of human resources across corporations.

Keywords: International labor markets; IFRS; International financial transparency; European Union

JEL Classification: G14, G15, G30, K22, M41

Suggested Citation

Golshan, Nargess and Khurana, Inder and Silva, Felipe Bastos G., Financial Transparency, Labor Productivity, and Real Wages (April 19, 2003). Journal of International Accounting Research (forthcoming), Available at SSRN: https://ssrn.com/abstract=3369904 or http://dx.doi.org/10.2139/ssrn.3369904

Nargess Golshan (Contact Author)

Indiana University - Kelley School of Business - Department of Accounting ( email )

1309 E. 10th Street
Bloomington, IN 47405
United States

Inder Khurana

University of Missouri at Columbia - Robert J. Trulaske, Sr. College of Business ( email )

331 Cornell Hall
Columbia, MO 65211
United States
573-882-3474 (Phone)
573-882-2437 (Fax)

Felipe Bastos G. Silva

University of Missouri, Columbia ( email )

331 Cornell Hall
Columbia, MO 65211
United States
5738829905 (Phone)

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