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Corporate Culture, Special Items, and Firm Performance

Author

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  • S. Thomas Kim

    (Collins College of Business, The University of Tulsa, Tulsa, OK 74104, USA)

  • Li Sun

    (Collins College of Business, The University of Tulsa, Tulsa, OK 74104, USA)

Abstract

This study analyzes the relationship between corporate culture, the likelihood of reporting special items, and firm performance. We find a significant negative relation between corporate culture and special items using more than 55,000 firm-year observations from 6931 U.S. corporations between 2002 and 2021. The result suggests that firms with strong corporate cultures are less likely to use and report special items. Firms with lower performance mainly drive the negative relation; the pattern indicates that firms with weaker corporate cultures are prone to manage earnings using special items.

Suggested Citation

  • S. Thomas Kim & Li Sun, 2024. "Corporate Culture, Special Items, and Firm Performance," IJFS, MDPI, vol. 12(3), pages 1-21, August.
    • Handle: RePEc:gam:jijfss:v:12:y:2024:i:3:p:83-:d:1461994
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    References listed on IDEAS

    as
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    4. Edward J. Riedl & Suraj Srinivasan, 2010. "Signaling Firm Performance Through Financial Statement Presentation: An Analysis Using Special Items," Contemporary Accounting Research, John Wiley & Sons, vol. 27(1), pages 289-332, March.
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    6. Kai Li & Feng Mai & Rui Shen & Xinyan Yan, 2021. "Measuring Corporate Culture Using Machine Learning," NBER Chapters, in: Big Data: Long-Term Implications for Financial Markets and Firms, pages 3265-3315, National Bureau of Economic Research, Inc.
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