We study labor unions, an important stakeholder group that has not been a focus of the earnings smoothing literature. We posit that managers strike a balance between sheltering resources from employees’ profit sharing demands and catering to employees’ aversion to downside risk by smoothing...

Credit rating agencies (CRAs) have considerable privileged access to corporate management and are therefore a potentially important source of information to the equity market. We study how stock analysts incorporate bond ratings in their earnings forecasts. We develop an economic framework for...

We examine whether foreign investors influence a local firm's income smoothing, using a sample of Korean firms from 2000 to 2013. We hypothesize that given innate informational difficulties of overseas investments, foreign investors demand less noisy and more sustainable earnings, and to satisfy...

We study manufacturing firms' asymmetric inventory investment in response to sales changes. Focusing on the costs of resource adjustment and stockout which likely differ in sales-increasing and sales-decreasing periods, we predict and find that inventory investment declines less during periods...

This paper investigates how supply chain management (SCM) efficiency affects the value investors attach to the change in a company's inventory holdings. Based on a large number of U.S. firms from 1971 to 2013, we find that, on average, one dollar of inventory change is valued at $0.507 in the...

We examine how firms’ labor skill heterogeneity affects dividend policy. Since it is more costly to hire, retain, and layoff skilled labor than unskilled labor, we hypothesize that firms relying more on skilled labor are more cautious in setting their dividend policy, which competes with...

This study examines the effects of takeover defenses on the value implication of dividends. Using the framework of Fama and French (1998), the paper shows that dividends paid by managers with strong managerial power resulting from takeover protection measures are more valued in the stock market....

We study manufacturing firms’ asymmetric inventory investment in response to sales changes. Focusing on the costs of resource adjustment and stockout which likely differ in sales-increasing and sales-decreasing periods, we predict and find that inventory investment declines less during periods...