International Reporting Transparency and Labor Market Outcomes

54 Pages Posted: 1 Feb 2021 Last revised: 5 Apr 2021

See all articles by Nargess Golshan

Nargess Golshan

University of Kentucky

Inder K. Khurana

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

Felipe Bastos G. Silva

University of Missouri, Columbia

Date Written: April 4, 2021

Abstract

Financial reporting 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). Using the mandatory IFRS adoption by European Union countries as a setting to proxy for enhanced reporting transparency, we document subsequent increases in labor productivity and wages for manufacturing industries in member countries. The main effect is mostly driven by increases in output rather than decreases in labor demand and is amplified by changes in earnings quality after the IFRS adoption. Collectively, our results underscore that the benefits of a cross-country increase in reporting transparency go beyond the effects on capital markets and corporate investments, with implications for labor markets equilibria.

Keywords: International labor markets; International reporting standards; IFRS; European Union.

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

Suggested Citation

Golshan, Nargess and Khurana, Inder and Silva, Felipe Bastos G., International Reporting Transparency and Labor Market Outcomes (April 4, 2021). Available at SSRN: https://ssrn.com/abstract=3369904 or http://dx.doi.org/10.2139/ssrn.3369904

Nargess Golshan (Contact Author)

University of Kentucky ( email )

Lexington, KY 40506
United States
40506 (Fax)

HOME PAGE: http://nargessgolshan.com

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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