We examine how political ideology shapes labor market signals. Using proprietary data on résumé edits, we identify additions and deletions of ESG-related language in descriptions of past roles. We find that these revisions are shaped by both workers' political ideology and the broader political environment. Democrat-leaning workers are more likely than Republicanleaning workers to add ESG language to their résumés, with this partisan divide widening during the Biden administration. Vague, unspecific additions appear most strategic, as they are disproportionately reversed following the start of Trump's second term. Exploiting the staggered adoption of ESG commitments by large corporations during the Biden presidency, we find that workers who view these firms as potential employers increase their use of ESG language relative to other workers. These revisions are associated with tangible career benefits, including greater job mobility and higher promotion rates. They also distort labor market matching by helping less qualified workers obtain positions, and potentially impose hiring costs on employers.

We survey nearly 6,000 employees of 1,265 publicly traded companies to understand whether and how public company employees use financial reporting information. Employees indicate that they: (1) are nearly universally aware of their firm's financial news, but primarily learn of such news through internal company communications rather than public news sources; (2) view their employer's financial condition as an important factor in employment decisions; (3) possess financial incentives to monitor reported results, with a majority reporting compensation linked to financial performance; (4) find operating metrics like earnings and sales more decision-relevant than stock returns; and (5) use public financial disclosures, such as earnings press releases and conference calls, to assess their employment prospects. We also provide novel evidence that firms operate an internal reporting regime that mirrors external reporting, disseminating financial information to employees predominantly on a quarterly basis, and that external disclosures may serve as verification for management's internal narrative. By measuring baseline rates of awareness, sources of information acquisition, preferred metrics, and perceived usefulness, we establish facts that can both support prior, and anchor future, research in the growing literature at the intersection of labor and accounting.

This survey analyzes literature at the intersection of financial disclosure and labor economics. While accounting research has long considered how high-ranking executives and directors influence corporate reporting, more recent work has expanded our understanding of lower-level employees, e.g., the “rank-and-file,” as both producers and users of corporate information. We introduce a Labor Life Cycle (LLC) framework to organize employment relationships into four stages: Human Capital Development, Search and Matching, Employment, and Turnover and Retirement. At each stage, we first outline the principal economic theories and map them to the extant accounting research. We then consider open questions and provide suggestions for future studies. Three themes emerge from our analysis. First, rank-and-file labor often shapes the corporate information environment: factors such as workforce quality, compensation, and stability are predictors of reporting and audit outcomes. Second, financial reporting acts as a labor market institution: in particular, mandatory disclosures influence job search, wage bargaining, and mobility. Third, the feedback loop between reporting and labor decisions, where disclosure affects employment and employment affects disclosure, remains a central open question. The survey provides accounting researchers with a structured introduction to the economic theories that underpin work on rank-and-file labor and organizes a large empirical literature into a novel framework. Our LLC framework identifies major findings and open questions where accounting researchers are well-positioned to provide new insights.

ABSTRACT This study examines whether enterprise resource planning (ERP) implementations are associated with reductions in corporate misconduct. Specifically, we study the relation between staggered facility-level rollouts of ERP systems and facility-level regulatory violations across a large sample of U.S. firms. Our results indicate that facility-level ERP adoptions are associated with substantial reductions in local violations and penalties. Additional analyses suggest that the effects are more pronounced among facilities incorporating advanced analytics into their systems and among workforces that are less resistant to technology change. Overall, our results suggest that ERP systems generate indirect effects that enhance compliance outcomes across a wide range of violations. JEL Classifications: M40, M41

We examine how common media holding companies impact the uniqueness of business press content. Consistent with common media holding companies reducing the diversity of perspectives among journalists, we find that media outlets are more likely to cover the same earnings announcement and utilize more similar tone and content when they belong to a common holding company. We provide evidence that these effects are enhanced by outlet reach and economic incentives to share content. Finally, we provide evidence consistent with coverage by common media holding companies impeding price formation. Overall, our findings suggest that content within common media holding companies is less diverse and that this may have negative implications for markets.

This study examines the investment value of information provided by crypto-influencers, that is, social media influencers covering crypto assets on Twitter. We examine the returns associated with approximately 36,000 tweets issued by 180 of the most prominent crypto social media influencers covering over 1,600 crypto assets for the two years spanning through December 2022. Our primary results indicate that crypto-influencers’ tweets are initially associated with positive returns. However, these tweets are followed by significant negative longer-horizon returns, suggesting they generate minimal long-term investment value. These effects are most pronounced for tweets issued by crypto-influencers proclaiming to be crypto experts, for smaller cap crypto asset securities and for self-described experts with many Twitter followers. In an additional analysis, we use machine-learning methods to classify tweets and find that this pattern of results strengthens when the tweets have a more positive sentiment or relate to buy recommendations.

This study examines the investment value of information provided by crypto-influencers, that is, social media influencers covering crypto assets on Twitter. We examine the returns associated with approximately 36,000 tweets issued by 180 of the most prominent crypto social media influencers covering over 1,600 crypto assets for the two years spanning through December 2022. Our primary results indicate that crypto-influencers' tweets are initially associated with positive returns. However, these tweets are followed by significant negative longer-horizon returns, suggesting they generate minimal long-term investment value. These effects are most pronounced for tweets issued by crypto-influencers proclaiming to be crypto experts, for smaller cap crypto asset securities and for self-described experts with many Twitter followers. In an additional analysis, we use machine-learning methods to classify tweets and find that this pattern of results strengthens when the tweets have a more positive sentiment or relate to buy recommendations.

Employees have been resigning at higher rates in recent years, particularly since the start of the pandemic. This resignation is true at all wage levels within organizations, from low wage to more senior, mid-career employees with higher wages. This resignation is purported to be due to existing dissatisfaction with the workplace and, consequently, increased expectations around work, including but not limited to wages as well as non-wage benefits and workplace culture (e.g., Sull, Sull, and Zweig, 2022). Furthermore, firms face stakeholder and public pressure to become more inclusive across ethnic and racial groups, and better represent society at large. Many firms in the United States have struggled to both recruit and retain employees from underrepresented groups, highlighting managers’ need for best practices to retain this talent. Employee resignations are not only disruptive for employees, but also for the firms that employ them. Such turnover costs are often a significant component of human resource expenses that ultimately affect firm financial performance. Further, turnover can be an indicator of ineffective or even toxic workplace culture, which affects not only job tenure, but the ability of firms to be selective in hiring and the ultimate productivity of those they do hire. What are some of the factors that lead to higher turnover or reduce it? How do firms build a more effective workplace culture that attracts and retains talented employees? This symposium examines these questions from both a large-scale empirical and qualitative research perspective. Three presentations, including two quantitative studies examining wages, workplace culture and turnover, and a qualitative analysis of Walmart’s changes to wages and working conditions, bring forth timely and important research to understand how firms can respond to workplace challenges. Specific areas addressed in this symposium include: - how firms can increase diversity among employees, develop more equitable pay practices and create inclusive workplace cultures; - the impact of pay practices on employee turnover and firm performance; and - the impact of increased wages and benefits on workplace culture and performance within a specific firm. A full discussion is planned, one that encompasses academic commentary as well as translation to how this appears in the workplace with an ultimate objective to inform business practices. Do Diverse Directors Influence DEI Outcomes? Author: Jillian Grennan; U. of California, Berkeley Author: Wei Cai; Columbia Business School Author: Aiyesha Dey; Harvard Business School Author: Joseph Pacelli; Harvard Business School Author: Lin Qiu; Krannert School of Management, Purdue U. Still Broke Walmart’s Remarkable Transformation and the Limits of Socially Conscious Capitalism Author: Rick Wartzman; Drucker Institute, Claremont Graduate U. (When) Does Paying Living Wages Affect Employee Turnover and Firm Performance? Author: Nathan Barrymore; McCombs School of Business, U. of Texas at Austin Author: Rachelle Sampson; U. of Maryland

Journal of Applied Corporate FinanceEarly View ORIGINAL ARTICLE Workplace gender diversity and employee turnover Aiyesha Dey, Aiyesha Dey Harvard Business School, Boston, Massachusetts, USASearch for more papers by this authorJoseph Pacelli, Corresponding Author Joseph Pacelli [email protected] Harvard Business School, Boston, Massachusetts, USA Correspondence Joseph Pacelli, Harvard Business School, Boston, MA, USA. Email: [email protected]Search for more papers by this authorGeorge Serafeim, George Serafeim Harvard Business School, Boston, Massachusetts, USASearch for more papers by this authorFangzhong Liu, Fangzhong Liu State Street Associates The authors declare that they have no relevant or material financial interests that relate to the research described in this paper. This material is for informational purposes only. The views expressed in this material are the views of the authors, are provided “as-is” at the time of first publication, are not intended for distribution to any person or entity in any jurisdiction where such distribution or use would be contrary to applicable law and are not an offer or solicitation to buy or sell securities or any product. The views expressed do not necessarily represent the views of State Street Global Markets and/or State Street Corporation and its affiliates.Search for more papers by this author Aiyesha Dey, Aiyesha Dey Harvard Business School, Boston, Massachusetts, USASearch for more papers by this authorJoseph Pacelli, Corresponding Author Joseph Pacelli [email protected] Harvard Business School, Boston, Massachusetts, USA Correspondence Joseph Pacelli, Harvard Business School, Boston, MA, USA. Email: [email protected]Search for more papers by this authorGeorge Serafeim, George Serafeim Harvard Business School, Boston, Massachusetts, USASearch for more papers by this authorFangzhong Liu, Fangzhong Liu State Street Associates The authors declare that they have no relevant or material financial interests that relate to the research described in this paper. This material is for informational purposes only. The views expressed in this material are the views of the authors, are provided “as-is” at the time of first publication, are not intended for distribution to any person or entity in any jurisdiction where such distribution or use would be contrary to applicable law and are not an offer or solicitation to buy or sell securities or any product. The views expressed do not necessarily represent the views of State Street Global Markets and/or State Street Corporation and its affiliates.Search for more papers by this author First published: 08 November 2023 https://doi.org/10.1111/jacf.12579 Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onEmailFacebookTwitterLinkedInRedditWechat Early ViewOnline Version of Record before inclusion in an issue RelatedInformation

We examine how brokerage firm initial public offerings (IPOs) influence the research quality of sell-side analysts employed by the brokerage. Our main results focus on earnings forecast bias and absolute forecast errors as proxies for research quality. Using a staggered difference-in-differences analysis, we document significant decreases in forecast bias and absolute forecast error during the two-year period centered on the analysts’ brokerage house IPO. In additional analyses, we explore several potential explanations for the short-term benefits of brokerage house IPOs. We find some evidence that IPOs delay the departure of more talented analysts and that the effects are more concentrated among analysts and brokers that face more scrutiny. This paper was accepted by Brian Bushee, accounting. Supplemental Material: Data are available at https://doi.org/10.1287/mnsc.2022.4610 .

We examine whether social media activity can reduce corporate misconduct. We use the staggered introduction of 3G mobile broadband access across the United States to identify exogenous increases in social media activity and test whether access to 3G reduces misconduct. We find that facilities substantially reduce both violations and penalties following the introduction of 3G in a local area. To validate social media activity as the mechanism, we show that 3G access results in sharp increases in Tweet volume and that facilities located in areas with high Tweet volume misbehave less. The effect of 3G access on misconduct is stronger for facilities of more visible firms and concentrated in nonfinancial violations, such as those involving unsafe workplace conditions and inappropriate treatment of employees and customers. Overall our results demonstrate that social media plays an important role in monitoring corporate misconduct.

We examine how information about the diversity of a potential employer's workforce affects individuals' job-seeking behavior. We embed a field experiment in job recommendation emails from a leading career advice agency in the United States. The experimental treatment involves highlighting a diversity metric to jobseekers. Our results indicate that disclosing diversity scores in job postings leads jobseekers to click on firms with higher diversity scores, with such effects varying across jobseeker demographics. A follow-up survey provides evidence on potential explanations for why jobseekers value diversity information. We then examine how jobseekers' preferences for diversity relate to disclosure choices under the U.S. SEC Human Capital Disclosure requirement. We find that firms in industries characterized by higher jobseeker responsiveness to diversity information tend to voluntarily disclose diversity metrics in their 10-Ks under these new disclosure requirements.

Ineffective internal controls over financial reporting often relates to a lack of qualified personnel with sufficient accounting and technical expertise. In this study, we examine whether firms respond to internal control failures by increasing their demand for specific accounting and finance skills. Using unique data containing an extensive collection of job postings, we document significant increases in firms' demand for employees with financial skills following the disclosure of an internal control weakness. This demand effect is more pronounced among jobs requiring accounting skills or accounting software knowledge, but also extends to non-accounting personnel that interface with accounting functions, suggesting an important role for all firm personnel in remediating internal control failures. We also find that increased financial skill demand is associated with a higher likelihood of internal control remediation, especially for firms with restatements. We also provide additional evidence consistent with increased financial skill demand relating to the disclosure of a material weaknesses rather than a proactive firm response to internal control issues. Overall, our findings shed new light on how firms internally respond to ineffective internal controls by increasing their demand for financial skills in their workforce.

We examine whether greater board diversity is associated with more diverse workforce hiring, more equitable pay practices, and more inclusive corporate cultures. Using a variety of quasi-experimental designs, we document increases in managerial and staff diversity in the years following a diverse director's appointment, consistent with diversity initiatives ``trickling down'' within a firm. We also find that employees perceive improvements in the culture, stronger community-building norms, and approve more of senior management. We, however, see limited real effects in terms of gender and racial pay gaps. Additional findings show board diversity works through allyship, homophily, and cognitive diversity channels. Finally, we examine the extent to which environmental, social, governance (ESG) ratings capture these within-firm social gains and document discrepancies.

We offer novel evidence on how the nature of brokerage-client relationships can influence the quality of equity research. We exploit a unique setting provided by the Protocol for Broker Recruiting to examine whether relaxed broker noncompete agreement enforcement generates spillover effects on sell-side analysts. Entry into this agreement reassigns ownership of the client relationship from the brokerage to individual brokers, potentially generating a greater standard of care. Using a generalized difference-in-differences research design, we provide evidence consistent with brokers reducing pressure on analysts to produce optimistic research following protocol entry. This effect is concentrated among less experienced and non-All Star analysts, who previously may have faced the greatest pressures to sacrifice objectivity. Additionally, we find that analysts issue more accurate forecasts and generate reports with heightened market reactions following protocol entry. Our collective evidence sheds new light on how the nature of brokerage relationships can influence analysts’ research production.

In this study, we examine whether firms respond to internal control weaknesses (ICWs) by requiring accounting-specific skills when hiring rank-and-file employees. Using unique data containing an extensive collection of job postings, we document significant increases in firms’ job postings that list accounting skills following the disclosure of an ICW. This effect is more pronounced for firms with better financial resources and when ICWs are more severe or personnel-related. In addition, our results extend to employees that are not specifically designated as accountants, suggesting a broader role for rank-and-file employees in influencing internal control quality. Finally, we find that increases in job postings with accounting skill requirements are associated with improvements in internal controls and a higher likelihood of ICW remediation. Overall, our findings shed new light on how firms respond to ineffective internal controls by increasing their emphasis on accounting skills in their workforce.

We provide the first comprehensive analysis of the properties of investment recommendations generated by “Robo-Analysts,” which are human-analyst-assisted computer programs conducting automated research analysis. Our results indicate that Robo-Analyst recommendations differ from those produced by traditional “human” research analysts across several important dimensions. First, Robo-Analysts produce a more balanced distribution of buy, hold, and sell recommendations than do human analysts and are less likely to recommend “glamour” stocks and firms with prospective investment banking business. Second, automation allows Robo-Analysts to revise their recommendations more frequently than human analysts and incorporate information from complex periodic filings. Third, while Robo-Analysts’ recommendations exhibit weak short-window return reactions, they have long-term investment value. Specifically, portfolios formed based on the buy recommendations of Robo-Analysts significantly outperform those of human analysts. Overall, our results suggest that automation in the sell-side research industry can benefit investors.

A company's culture represents one of the most important factors that job seekers consider. In this study, we examine how firms craft their job postings to convey their cultures and whether doing so helps attract employees. We utilize state-of-the art machine learning methods to develop a comprehensive dictionary of corporate values across the near-universe of job postings. Our descriptive analysis reveals that firms are more likely to advertise corporate culture in their postings when their culture is strong, as evidenced from strong external ratings and infrequent employment violations. In addition, culture information is more prevalent among job postings for positions in which the labor pool is tighter. Our main analyses demonstrate that culture information in job postings does attract job seekers, as it is associated with higher worker inflows. Culture information has a more pronounced effect on worker inflows following the Black Lives Matter movement, which increased the importance of culture to job seekers. In addition, job seekers respond more to culture information in job postings when alternative sources of information about firm culture are less readily available. Overall our findings suggest that job postings are an important mechanism for communicating cultural values to prospective employees and attracting talent.

We investigate the effects of countercyclical prudential buffers on bank risk-taking. We exploit the introduction of dynamic loan loss provisioning in Spain, mandating that banks use historical average loss rates in their estimation of loan loss provisions. We find that dynamic loan loss provisioning is associated with reductions in timely loan loss provisioning. Banks that previously recognized loan losses in a timely fashion exhibit the greatest reductions in timeliness and consequently extend loans to riskier borrowers with lower accounting quality. Our results have policy implications for the debate on the use of financial reporting requirements in mitigating capital pro-cyclicality.