Do corporate site visits by analysts and institutional investors increase labor investment efficiency?

Wenfei Li, Zhenyang Tang and Chufen Chen

Asian Review of Accounting, 2024, vol. 32, issue 5, 811-840

Abstract: Purpose - Corporate site visits increase labor investment efficiency. Design/methodology/approach - Our empirical model for the baseline analysis follows those of Junget al.(2014) and Ghalyet al. (2020). Findings - We show that corporate site visits are associated with significantly higher labor investment efficiency; more specifically, site visits reduce both over-hiring and under-hiring of employees. The effect of site visits on labor investment efficiency is more pronounced for firms with higher labor adjustment costs, greater financial constraints, weaker corporate governance and lower financial reporting quality. We also find that site visits mitigate labor cost stickiness. Originality/value - First, while the literature has suggested how the presence of institutional investors and analysts may affect labor investment decisions, we focus on institutional investors and analysts’ activities and interactions with firm executives. We provide direct evidence that institutional investors and analysts may use corporate site visits to improve labor investment efficiency. Second, our study adds to a line of recent studies on how corporate site visits reduce information asymmetry and agency conflicts. We show that corporate site visits allow institutional investors and analysts to influence labor investment efficiency. We also provide new evidence that corporate site visits reduce labor cost stickiness.

Keywords: Institutional investors; Corporate site visits; Labor investment efficiency; Monitoring (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:arapps:ara-09-2023-0241

DOI: 10.1108/ARA-09-2023-0241

Access Statistics for this article

Asian Review of Accounting is currently edited by Prof. Haiyan Zhou

More articles in Asian Review of Accounting from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().