노동조합의 영향력과 이익조정

This study examines the relationship between the impact of labor union and earnings management in Korea context. To achieve the afore-mentioned research objective, we first define the impact of labor union as bargaining power of labor union and then empirically analyze its relevance to the level of bargaining power and the downward earnings management. We measure the bargaining power of labor union by both the characteristics of umbrella unions and unionization rate based on the workplace panel survey data provided by the Korea Labor Institute. Downward earnings management is defined as dummy variable that takes the value of one if discretionary accruals measured by Kothari et al.(2005) is negative and zero otherwise. We find that when the bargaining power of labor union increase, managers engaged in downward earnings management more aggressively in order to in order to gain a more advantageous position in negotiations. This result suggests that labor union in Korea fail to play a role in sound governance that effectively control earnings management, and that managers regard labor unions as a ‘rent-seekers’, distorting accounting information reporting to gain an edge in negotiations with them. This result also shows that a distortion of financial information attribute to the bargaining power of labor union may lead to economic costs for external investors in the capital market