The literature suggests that the presence of a labor union poses operational risk for firms by reducing operating flexibility. We posit that managers stockpile inventory in response to their heightened operational risk, such as potential strikes, so that managers maintain bargaining power in...

We study labor unions, an important stakeholder group that has not been a focus of the earnings smoothing literature. We posit that managers strike a balance between sheltering resources from employees’ profit sharing demands and catering to employees’ aversion to downside risk by smoothing...

The economic literature shows that production market competition could have nonlinear effects on corporate behaviors, such as management effort and innovative activities. We extend the literature by focusing on the influence of product market competition on earnings quality. We propose and...