노동조합과 재무분석가 이익예측

This study examines the relationship between labor union and the characteristics of analysts forecasts. Specifically, we investigate whether the presence of union (bargaining power of unions) is related to the absolute error in analysts forecasts. A union tries to protect employee rights and improve employee welfare. Futhermore, a union tries to reflect its opinion in the process of decision-making for management. For example, Hyundai Heavy Industries' labor union was known to demand for the right of recommendation for outside director reflecting its opinion. For that reason, managers have incentives to have good relationships with employees, because having non-cooperative labor can be detrimental (Hamm et al 2015). For example, as Hamm et al (2015) note, the United Airlines chapter of the Air Line Pilots Association requested the resignation of Glenn Tilton as CEO of the airline because of poor financial performance. More specifically, the United pilots created a web site that explained what they considered the failures of Tilton’s management. Therefore, the presence of unions might make managers’ incentives to have good relationships with employees even stronger and affect managerial behaviors, since, as Banning and Chiles (2007) note, unions alter the underlying employment relationship between employer and employee. Prior studies suggest two different perspectives on relation between labor union and the absolute error in analysts forecasts : On the one hand, when the bargaining power of unions increase, managers can increase information asymmetry in order to improve their negotiating position and this could leads to the increase in the absolute error in analysts forecasts. This perspective reflects that a union is a residual claimant (Ahn et al. 2011). In other words, this perspective stresses that unions, through collective bargaining, redistribute a larger portion of profits to their members and consequently decrease firm profitability. In other words, in a situation where the firm and the union share the profits, the union would attempt to maximize the utility of its members by increasing its share of the firm's surplus. Therefore, firms with a unionized workforce should have an incentive to hide or misrepresent their true position to take advantage of the negotiation (Reynolds et al. 1998; Ahn et al. 2011). On the other hand, when the bargaining power of unions increase, managers also can decrease information asymmetry because labor unions play a role as a part of the mechanism of corporate governance and this could leads to the decrease in the absolute error in analysts forecasts. This view emphasizes that management can achieve effective labor-management cooperation and goal alignment with unions by sharing information (Palmer 1977; Foley and Maunders 1977 ; Ahn et al. 2011). However, there is little evidence regarding the relationship between strong organized labor forces and analysts’ earnings forecasts. Therefore, it is an empirical question whether labor unions increase(decrease) the absolute error in analysts forecasts. We try to tackle this issue in this study by focusing on the characteristics in analysts’ earnings forecasts. Financial analysts use accounting information reported in financial statements. Therefore, if financial statements are more useful by organized labor forces, then the financial analysts should provide more accurate and less biased earnings forecasts. Using 1,158 firm-year observations of listed companies in the manufacturing industry from 2003 to 2008 in Korea, this study suggests that unionized firms are, on average, related to higher absolute error in analysts forecasts compared to non unionized firms. When it comes to union’s bargaining power, this study suggests that the umbrella unions which belong to the nation's two umbrella labor organizations - the Korea Confederation of Trade Unions (KCTU) and the Federation of Korea Trade Unions (FKTU) are, on average, related to higher absolute error in analysts forecasts compared to independent unionized firms, although unionization rate measured by proportion of workers that are union member is not related to absolute error in analysts forecasts. Specifically, this study suggests that the umbrella unions which belong to the Korea Confederation of Trade Unions (KCTU) are, on average, related to higher absolute error in analysts forecasts compared to the umbrella unions which belong to the Federation of Korea Trade Unions (FKTU). In addition, this study suggests that union’s bargaining power have positive impact on forecast optimism. We check the robustness of our results through a battery of robustness tests. This study makes contribution to the existing literature. To the best of our knowledge, this is the first study to focus on the relationship between labor union and the characteristics of analysts forecasts. This paper aims to enhance our understanding of the relationship between labor union and the usefulness of earnings information by providing fresh evidence that labor union significantly affects the characteristics of analysts forecasts.