Unemployment Risk and Accounting Conservatism

46 Pages Posted: 30 Dec 2019 Last revised: 17 Apr 2020

See all articles by Yongqiang Chu

Yongqiang Chu

Belk College of Business, UNC Charlotte

Shiang Liu

University of Wisconsin - La Crosse

Mingming Qiu

Michigan State University - Department of Finance

Date Written: December 8, 2019

Abstract

We examine the effect of labor unemployment risk on corporate accounting conservatism by exploring the relationship between unemployment insurance benefits and conservatism. We find that lower perceived unemployment risk (i.e. higher unemployment insurance benefits) is associated with lower conditional conservatism. The effect is more pronounced when employees are more exposed to unemployment risk and when the firms face higher bankruptcy or litigation risk.

Keywords: Labor Unemployment Risk, Corporate Accounting Policy, Conditional Accounting Conservatism, Bankruptcy Risk, Litigation Risk

JEL Classification: G30, G34, G38

Suggested Citation

Chu, Yongqiang and Liu, Shiang and Qiu, Mingming, Unemployment Risk and Accounting Conservatism (December 8, 2019). Available at SSRN: https://ssrn.com/abstract=3500288 or http://dx.doi.org/10.2139/ssrn.3500288

Yongqiang Chu

Belk College of Business, UNC Charlotte ( email )

9201 University City Boulevard
Charlotte, NC 28223
United States
7046877695 (Phone)

Shiang Liu (Contact Author)

University of Wisconsin - La Crosse ( email )

1725 State Street
La Crosse, WI 54601
United States
608.785.6655 (Phone)

Mingming Qiu

Michigan State University - Department of Finance ( email )

315 Eppley Center
East Lansing, MI 48824-1122
United States
5178842995 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
58
Abstract Views
348
rank
386,824
PlumX Metrics