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Strategic accounting choice around firm level labour negotiations

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Author Info

  • Ana María Sabater

    ()
    (Universidad de Alicante)

  • Araceli Mora

    ()
    (Universitat de València)

  • Beatriz García Osma

    (Universidad Autónoma de Madrid)

Abstract

We study accounting choice around firm-level collective agreement negotiations. Prior literature argues that managers make income-decreasing accounting choices to limit the concessions made to trade unions. However, empirical research to date fails to find evidence in support of this hypothesis. We expect that this lack of evidence is driven by the confounding effects of (i) methodological concerns and (ii) influential institutional factors. Using a sample of US firms that engage in firm-level labor bargaining during the period 1994-2007, we study whether managers act strategically in an attempt to reduce the proportion of firm wealth that is accrued to employees. Our findings suggest that managers take real rather than accounting actions to minimize payments. In particular, we find evidence consistent with (i) managerial strategic timing of the negotiation, and with (ii) increased conditional conservatism in the year of labor bargaining. We do not find evidence of earnings manipulation. This potentially signals that accounting choice around labor negotiations is informative rather than opportunistic. Keywords: accounting choice, earnings quality, collective bargaining. En el presente trabajo se estudia la elección de políticas contables en torno a la negociación de convenios colectivos. La literatura previa predice que los gerentes tratan de reducir el resultado contable para minimizar las concesiones realizadas a los sindicatos. Sin embargo, no hay evidencia empírica clara hasta la fecha que ratifique esta hipótesis. Esperamos que esta falta de evidencia se justifique por (i) problemas metodológicos de estudios previos, y (ii) la influencia de factores institucionales. Empleando una muestra de empresas de EEUU que negocian un convenio colectivo entre 1994 y 2007, se estudia si los gerentes actúan estratégicamente para reducir el porcentaje de renta empresarial que se transfiere a los trabajadores. Nuestros resultados sugieren que los gerentes se valen de decisiones operativas en lugar de contables para minimizar los pagos a empleados. En particular, encontramos evidencia de (i) elección estratégica de cuándo negociar, y (ii) mayor conservadurismo contable en el año del evento. No encontramos evidencia de gestión oportunista del resultado, lo que potencialmente indica que las decisiones contables en torno a la negociación colectiva son informativas.

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File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-2010-09.pdf
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Bibliographic Info

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie EC with number 2010-09.

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Length: 32 pages
Date of creation: Sep 2010
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasec:2010-09

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Keywords: elección contable; calidad del resultado; negociación colectiva;

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  1. Maria Teresa Balaguer-Coll & Diego Prior & Emili Tortosa-Ausina, 2010. "Devolution dynamics of Spanish local government," Environment and Planning A, Pion Ltd, London, vol. 42(6), pages 1476-1495, June.
  2. Francisco Requena & Guadalupe Serrano & Joan Martín Montaner, 2009. "The effects of immigration on the productive structure of Spanish regions," Working Papers. Serie EC 2009-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  3. Francisco José Goerlich Gisbert & Rafael Pinilla Pallejà, 2009. "Esperanzas de vida libres de discapacidad por sexo y comunidad autónoma: 2004-2006," Working Papers. Serie EC 2009-13, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  4. Jacint Balaguer Coll & José C. Pernías, 2010. "Spatial density, average prices and price dispersion. Evidence from the Spanish hotel industry," Working Papers. Serie EC 2010-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  5. Pilar Beneito López & Amparo Sanchis Llopis & María Engracia Rochina Barrachina, 2009. "The role of learning in innovation: in-house versus externally contracted R&D experience," Working Papers. Serie EC 2009-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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