We document that labor unionization rates are associated with lower levels of managerial overinvestment and underinvestment for a sample of 3,731 U.S. publicly traded firms over the period 1983-2013. This result is consistent with the explanation that labor unions can play a governance role in...

This study documents that the perception of high private control benefits in firms induces them to disclose private information about future earnings and cash flows through the practice of earnings smoothing. It also shows that this relationship is non-linear in nature. At low levels of...