U.S. CORPORATE PENSION EXPENSE AND THE 20072009 FINANCIAL CRISIS: AN INTERRUPTED TIME SERIES ANALYSIS

Benjamin B. Boozer, Julie A. Staples, S. Keith Lowe and Robert J. Landry

The International Journal of Business and Finance Research, 2016, vol. 10, issue 3, 29-38

Abstract: This research presents a model for predicting corporate pension expenses. By considering changes in financial statement variables that included operating profit margin, working capital levels, and cash levels the model explored directional impact on the dependent variable, pension expenses. Change was measured between 2004 and 2013 using the Kellough interrupted time series analysis to capture the effect of the 2007-2009 financial crisis. The analysis found that operating profit margin has a positive impact on pension expense levels, while higher levels of net working capital and cash have an inverse association. In finding the change variable of the interrupted time series event to have a positive sign, the analysis expands prior research in offering evidence that firms might not use pension expenses as a tool for earnings manipulation. Rather, firms appear to increase pension expense funding as a financial shock occurs but reduce during improving financial and economic conditions

Keywords: Pension Expense; Financial Crisis; Time Series (search for similar items in EconPapers)
JEL-codes: C22 G23 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ibf:ijbfre:v:10:y:2016:i:3:p:29-38

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