Does Accounting Comparability Affect Corporate Employment Decision-Making?

Zhang, Z., Ntim, C.G., Zhang, Q., and Elmagrhi, M. (2020). ‘Does Accounting Comparability affect Corporate Employment Decisions?’, British Accounting Review, Forthcoming.

53 Pages Posted: 10 Mar 2021

See all articles by Zhuang Zhang

Zhuang Zhang

University of Southampton - Southampton Business School

Collins G. Ntim

University of Southampton Business School, UK; University of Southampton

Qingjing Zhang

University of Southampton - Southampton Business School

Mohamed Elmagrhi

University of Huddersfield, Huddersfield Business School, Queensgate, Huddersfield, HD1 3DH; Swansea University, School of Management; University of Huddersfield - Business School

Date Written: July 14, 2020

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.

Keywords: accounting comparability; labour investment efficiency; employment decisions; corporate governance

JEL Classification: G31, G38, M41, M51

Suggested Citation

Zhang, Zhuang and Ntim, Collins G. and Zhang, Qingjing and Elmagrhi, Mohamed and Elmagrhi, Mohamed, Does Accounting Comparability Affect Corporate Employment Decision-Making? (July 14, 2020). Zhang, Z., Ntim, C.G., Zhang, Q., and Elmagrhi, M. (2020). ‘Does Accounting Comparability affect Corporate Employment Decisions?’, British Accounting Review, Forthcoming., Available at SSRN: https://ssrn.com/abstract=3768197

Zhuang Zhang

University of Southampton - Southampton Business School ( email )

Southampton, SO17 1BJ
United Kingdom

Collins G. Ntim

University of Southampton Business School, UK ( email )

Southampton Business School
Highfield
Southampton, England SO17 IBJ
United Kingdom
+44 (0) 238059 4285 (Phone)
+44 (0) 238059 3844 (Fax)

HOME PAGE: http://www.southampton.ac.uk/business-school/about/staff/cgn1n11.page

University of Southampton ( email )

Southampton, SO17 1BJ
United Kingdom

Qingjing Zhang (Contact Author)

University of Southampton - Southampton Business School ( email )

SO17 1BJ
United Kingdom

Mohamed Elmagrhi

University of Huddersfield, Huddersfield Business School, Queensgate, Huddersfield, HD1 3DH ( email )

HD1 3DH
United Kingdom
07455392947 (Phone)

Swansea University, School of Management ( email )

Bay Campus
Skewen
Swansea, SA1 8EN
United Kingdom
07455392947 (Phone)

University of Huddersfield - Business School ( email )

Queensgate
Huddersfield HD1 3DH
United Kingdom

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