Adwan2022_Article_Non-executiveEmployeeOwnership.pdf (926.46 kB)
Non-executive employee ownership and financial reporting quality: evidence from Europe
Version 2 2023-06-12, 07:44
Version 1 2023-06-10, 02:55
journal contribution
posted on 2023-06-12, 07:44 authored by Sami AdwanSami Adwan, Alaa Alhaj-Ismail, Ranko JelicRanko JelicThis paper examines the association between non-executive employee shareholding and financial reporting quality. The analysis is conducted using a sample of non-financial firms listed in eleven European countries between 2006 and 2017. We find a positive association between non-executive employee ownership and financial reporting quality. Furthermore, we find this positive association to be more pronounced for firms operating in the following settings: higher labour union density, more industry peer firms and more flexible labour market regulations. Overall, these findings support the view that employee shareholding enhances the quality of financial reporting by aligning the interests of employees with those of shareholders through two channels: reduced agency problems and enhanced employee retention. Our study contributes to the research on the impact of ownership characteristics on financial reporting incentives. It underscores the role non-executive employee ownership can play in improving a firm’s corporate governance and therefore the quality of financial reporting.
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- Published
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- Published version
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Review of Quantitative Finance and AccountingISSN
0924-865XPublisher
SpringerExternal DOI
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- Accounting and Finance Publications
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- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2022-03-21First Open Access (FOA) Date
2022-05-16First Compliant Deposit (FCD) Date
2022-03-18Usage metrics
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