IDEAS home Printed from https://ideas.repec.org/a/bpj/econoa/v18y2024i1p20n1032.html
   My bibliography  Save this article

Accounting Comparability and Labor Productivity: Evidence from China’s A-Share Listed Firms

Author

Listed:
  • Chen Xiangxiang

    (School of Economics and Management, Beijing University of Posts and Telecommunications, Beijing, China)

  • Gu Zhen

    (School of Accountancy, Central University of Finance and Economics, Beijing, China)

Abstract

This study examines the impact of accounting comparability on firms’ labor productivity. Using a panel data of China’s A-share listed firms from 2011 to 2022, we find that accounting comparability is positively related to firms’ labor productivity, and with every one-unit increase in the level of accounting comparability, the firms’ labor productivity is expected to increase by 2.97 units. In the mechanism analysis, we find that promoting human capital accumulation and reducing agency cost are crucial channels through which accounting comparability improves firms’ labor productivity. In additional analysis, we find that the positive effect of accounting comparability on labor productivity is more pronounced when firms have higher financing constraints and lower levels of corporate governance, and their peer firms have stronger accounting information quality. Our findings add to the body of knowledge regarding the determinants of labor productivity, and the labor-economic consequences of accounting comparability, and provide firms with evidence-based insights into improving their labor productivity.

Suggested Citation

  • Chen Xiangxiang & Gu Zhen, 2024. "Accounting Comparability and Labor Productivity: Evidence from China’s A-Share Listed Firms," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 18(1), pages 1-20.
    • Handle: RePEc:bpj:econoa:v:18:y:2024:i:1:p:20:n:1032
    DOI: 10.1515/econ-2022-0098
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/econ-2022-0098
    Download Restriction: no
    File URL: https://libkey.io/10.1515/econ-2022-0098?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Caggese, Andrea & Cuñat, Vicente & Metzger, Daniel, 2019. "Firing the wrong workers: Financing constraints and labor misallocation," Journal of Financial Economics, Elsevier, vol. 133(3), pages 589-607.
    2. Stefan Bender & Nicholas Bloom & David Card & John Van Reenen & Stefanie Wolter, 2018. "Management Practices, Workforce Selection, and Productivity," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 371-409.
    3. Emily Breit & Xuehu (Jason) Song & Li Sun & Joseph Zhang, 2019. "CEO power and labor productivity," Accounting Research Journal, Emerald Group Publishing Limited, vol. 32(2), pages 148-165, July.
    4. Marianne Bertrand & Sendhil Mullainathan, 2003. "Enjoying the Quiet Life? Corporate Governance and Managerial Preferences," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1043-1075, October.
    5. Jiaxiu He & Haoming Liu & Alberto Salvo, 2019. "Severe Air Pollution and Labor Productivity: Evidence from Industrial Towns in China," American Economic Journal: Applied Economics, American Economic Association, vol. 11(1), pages 173-201, January.
    6. Nicholas Bloom & John Van Reenen, 2007. "Measuring and Explaining Management Practices Across Firms and Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1351-1408.
    7. Carolina Hintzmann & Josep Lladós-Masllorens & Raul Ramos, 2021. "Intangible Assets and Labor Productivity Growth," Economies, MDPI, vol. 9(2), pages 1-21, May.
    8. Bjuggren, Carl Magnus, 2018. "Employment protection and labor productivity," Journal of Public Economics, Elsevier, vol. 157(C), pages 138-157.
    9. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    10. Tseng, Kevin & Zhong, Rong (Irene), 2024. "Standing on the shoulders of giants: Financial reporting comparability and knowledge accumulation," Journal of Accounting and Economics, Elsevier, vol. 78(1).
    11. Santhosh Ramalingegowda & Steven Utke & Yong Yu, 2021. "Common Institutional Ownership and Earnings Management," Contemporary Accounting Research, John Wiley & Sons, vol. 38(1), pages 208-241, March.
    12. Neumeyer, Pablo A. & Perri, Fabrizio, 2005. "Business cycles in emerging economies: the role of interest rates," Journal of Monetary Economics, Elsevier, vol. 52(2), pages 345-380, March.
    13. Yongming Zhang & Mohsen Imeni & Seyyed Ahmad Edalatpanah, 2023. "Environmental Dimension of Corporate Social Responsibility and Earnings Persistence: An Exploration of the Moderator Roles of Operating Efficiency and Financing Cost," Sustainability, MDPI, vol. 15(20), pages 1-18, October.
    14. Boochun Jung & Woo†Jong Lee & David P. Weber, 2014. "Financial Reporting Quality and Labor Investment Efficiency," Contemporary Accounting Research, John Wiley & Sons, vol. 31(4), pages 1047-1076, December.
    15. Saeid Aliahmadi, 2023. "Does CEO power moderate the link between labor productivity and financial performance: agency theory or stewardship theory," Asian Journal of Accounting Research, Emerald Group Publishing Limited, vol. 9(1), pages 47-56, December.
    16. Kim, Jeong-Bon & Li, Leye & Lu, Louise Yi & Yu, Yangxin, 2016. "Financial statement comparability and expected crash risk," Journal of Accounting and Economics, Elsevier, vol. 61(2), pages 294-312.
    17. Gerald J. Lobo & Michael Neel & Adrienne Rhodes, 2018. "Accounting comparability and relative performance evaluation in CEO compensation," Review of Accounting Studies, Springer, vol. 23(3), pages 1137-1176, September.
    18. Jozef Konings & Stijn Vanormelingen, 2015. "The Impact of Training on Productivity and Wages: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 485-497, May.
    19. Kale, Jayant R. & Ryan, Harley E. & Wang, Lingling, 2019. "Outside employment opportunities, employee productivity, and debt discipline," Journal of Corporate Finance, Elsevier, vol. 59(C), pages 142-161.
    20. Li, Hongbin & Liu, Pak Wai & Zhang, Junsen, 2012. "Estimating returns to education using twins in urban China," Journal of Development Economics, Elsevier, vol. 97(2), pages 494-504.
    21. Phung Anh Thu & Pham Quang Huy & Le Huu Tuan Anh, 2023. "Is related party transactions linked to accounting comparability? Evidence from emerging market," Cogent Business & Management, Taylor & Francis Journals, vol. 10(1), pages 2163094-216, December.
    22. Michael Neel & Irfan Safdar, 2024. "Financial statement relevance, representational faithfulness, and comparability," Review of Quantitative Finance and Accounting, Springer, vol. 62(1), pages 309-339, January.
    23. Ghaly, Mohamed & Dang, Viet Anh & Stathopoulos, Konstantinos, 2020. "Institutional investors' horizons and corporate employment decisions," Journal of Corporate Finance, Elsevier, vol. 64(C).
    24. Zhu, Minghao & Liang, Chen & Yeung, Andy C.L. & Zhou, Honggeng, 2024. "The impact of intelligent manufacturing on labor productivity: An empirical analysis of Chinese listed manufacturing companies," International Journal of Production Economics, Elsevier, vol. 267(C).
    25. Kazekami, Sachiko, 2020. "Mechanisms to improve labor productivity by performing telework," Telecommunications Policy, Elsevier, vol. 44(2).
    26. Jong‐Hag Choi & Sunhwa Choi & Linda A. Myers & David Ziebart, 2019. "Financial Statement Comparability and the Informativeness of Stock Prices About Future Earnings," Contemporary Accounting Research, John Wiley & Sons, vol. 36(1), pages 389-417, March.
    27. Black, Sandra E & Lynch, Lisa M, 1996. "Human-Capital Investments and Productivity," American Economic Review, American Economic Association, vol. 86(2), pages 263-267, May.
    28. Adamu Jibir & Musa Abdu & Abdullahi Buba, 2023. "Does Human Capital Influence Labor Productivity? Evidence from Nigerian Manufacturing and Service Firms," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 805-830, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gan Quan, 2024. "Optimizing Emergency Logistics Centre Locations: A Multi-Objective Robust Model," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 18(1), pages 1-20.
    2. Zhang, Zhuang & Ntim, Collins G. & Zhang, Qingjing & Elmagrhi, Mohamed H., 2020. "Does accounting comparability affect corporate employment decision-making?," The British Accounting Review, Elsevier, vol. 52(6).
    3. Le, Anh-Tuan & Hongren Huang, Henry & Do, Trung K., 2024. "The bright side of staggered boards: Evidence from labor investment efficiency," Journal of Contemporary Accounting and Economics, Elsevier, vol. 20(3).
    4. Cao, June & Li, Wenwen & Hasan, Iftekhar, 2023. "The impact of lowering carbon emissions on corporate labour investment: A quasi-natural experiment," Energy Economics, Elsevier, vol. 121(C).
    5. Wang, Sai & Wen, Wen & Niu, Yuhao & Li, Xin, 2024. "Digital transformation and corporate labor investment efficiency," Emerging Markets Review, Elsevier, vol. 59(C).
    6. Mbanyele, William & Huang, Hongyun & Muchenje, Linda T. & Zhao, Jun, 2024. "How does climate regulatory risk influence labor employment decisions? Evidence from a quasi-natural experiment," China Economic Review, Elsevier, vol. 87(C).
    7. Sivropoulos-Valero, Anna Alexandra, 2021. "Education and economic growth," LSE Research Online Documents on Economics 114434, London School of Economics and Political Science, LSE Library.
    8. Do, Trung K. & Le, Anh-Tuan, 2022. "Shareholder litigation rights and labor investment efficiency," Finance Research Letters, Elsevier, vol. 46(PA).
    9. Anna Valero, 2021. "Education and economic growth," POID Working Papers 006, Centre for Economic Performance, LSE.
    10. Xia, Yanchun & Liu, Yu & Guo, Shijun & Xia, Yufeng, 2024. "IPO suspensions and labor employment decisions: Evidence from China," Research in International Business and Finance, Elsevier, vol. 70(PB).
    11. Anna Valero, 2021. "Education and economic growth," CEP Discussion Papers dp1764, Centre for Economic Performance, LSE.
    12. Ma, Guangyuan & Kong, Dongmin & Liu, Shasha, 2023. "Credit stimulus and corporate excess employees," International Review of Financial Analysis, Elsevier, vol. 89(C).
    13. Ang, James & Yan, Zhenli & Xiao, Tusheng & Yuan, Chun & Wang, Jingfang, 2024. "Impact of Fintech on labor allocation efficiency in firms: Empirical evidence from China," Global Finance Journal, Elsevier, vol. 62(C).
    14. Alona Bilokha & Sudip Gupta, 2024. "Shareholder litigation rights and firm productivity," Financial Markets, Institutions & Instruments, John Wiley & Sons, vol. 33(2), pages 65-90, May.
    15. Sualihu, Mohammed Aminu & Rankin, Michaela & Haman, Janto, 2021. "The role of equity compensation in reducing inefficient investment in labor," Journal of Corporate Finance, Elsevier, vol. 66(C).
    16. Chowdhury, Hasibul & Estreich, Timothy & Hossain, Ashrafee & Zheng, Jiayi, 2024. "U.S. Political corruption and labor investment (in)efficiency," Global Finance Journal, Elsevier, vol. 60(C).
    17. Fan, Rui & Pan, Jianping & Yu, Minggui & Gao, Hao, 2022. "Corporate governance of controlling shareholders and labor employment decisions: Evidence from a parent board reform in China," Economic Modelling, Elsevier, vol. 108(C).
    18. Li, Yulin & Cheong, Chee Seng & Canil, Jean, 2024. "CEO-employee pay ratio and labor investment efficiency," Finance Research Letters, Elsevier, vol. 67(PA).
    19. Bai, Min & Fu, Yumei & Sun, Mingwei, 2023. "Corporate diversification and labor investment efficiency: Evidence from China," Economic Modelling, Elsevier, vol. 127(C).
    20. Jia, Jing & Li, Zhongtian, 2024. "Opioid abuse and labor investment efficiency," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 1267-1285.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:econoa:v:18:y:2024:i:1:p:20:n:1032. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.