Financial disclosure transparency and employee wages

John (Jianqiu) Bai; Matthew Serfling; Sarah Shaikh

doi:10.1111/fire.12313

journal article Jul 18, 2022

Financial disclosure transparency and employee wages

John (Jianqiu) Bai Matthew Serfling Sarah Shaikh

Financial Review Vol. 57 No. 4 pp. 751-773 · Wiley

View at Publisher Save 10.1111/fire.12313

Abstract

AbstractWe test the hypothesis that less transparent financial disclosures are an undesirable firm attribute that increase the amount of information and unemployment risk that employees bear, resulting in a wage premium. Using establishment‐level wage data from the U.S. Census Bureau, we document that firms with less transparent disclosures pay their employees more, especially when employees bear greater information acquisition costs, have more influence in the wage‐setting process, and own more stock. Our results hold after utilizing instrumental variables and exploiting two quasi‐natural experiments. Overall, our results suggest that disclosure choices can generate externalities on an important group of stakeholders.

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Details

Published: Jul 18, 2022
Vol/Issue: 57(4)
Pages: 751-773
License: View

Authors

J

John (Jianqiu) Bai

Finance Group at D'Amore‐McKim School of Business Northeastern University Boston Massachusetts USA

M

Matthew Serfling

Department of Finance University of Tennessee Knoxville Tennessee USA

S

Sarah Shaikh

Department of Accounting University of Washington Seattle Washington USA

Cite This Article

John (Jianqiu) Bai, Matthew Serfling, Sarah Shaikh (2022). Financial disclosure transparency and employee wages. Financial Review, 57(4), 751-773. https://doi.org/10.1111/fire.12313

Financial disclosure transparency and employee wages

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