Current Issue

CONTENTS of Volume 23, Number 2, December 2017

  • SUNGCHOON KANG, JEONG-YEON LEE

  • Internal Labor Markets and Firm Innovation

  • ABSTRACT

    This study examines the relations between internal labor markets and organizational innovation. From the knowledge-based view, we hypothesize that ILMs will be positively associated with organizational innovation by encouraging employees to share and integrate their knowledge. We also attempt to uncover potential moderating effects of environmental dynamism by focusing on its influence on knowledge stock and flow under ILMs. The empirical results from a sample of 205 firms show that ILMs have an overall positive influence on organizational innovation. However, the positive effect is more pronounced as environmental dynamism increases.

  • KEYWORDS

    Internal labor markets (ILMs), Organizational innovation, Resource-based view, Knowledge management, Environmental dynamism

  • SIMON YU KIT FUNG, WOO-JONG LEE, BIN SRINIDHI, LIXIN (NANCY) SU

  • Auditors’ Responses to Organized Labor in Client Firms

  • ABSTRACT

    Using a sample of US firms for the period 2000-2011, we examine whether organized labor in audit client firms affects auditor decisions such as audit fees and going-concern qualifications. We find that labor unionization is associated with higher audit fees and a higher likelihood of going-concern qualifications but shorter audit report lags, and the results on audit fees are stronger in the case of strikes. These results suggest that the presence of labor union(s) in a client firm constitutes a non-trivial risk element to auditors, which cannot be mitigated by additional audit effort.

  • KEYWORDS

    Labor union, Audit fees, Going-concern audit opinions, Audit report

  • KUAN-HUI LEE

  • The Variation of Liquidity Risk Premium

  • ABSTRACT

    New liquidity measure, based on trading volume induced by order flow as in Pastor and Stambaugh (2002) but estimated with turnover rather than with absolute level of dollar volume, is introduced and analyzed in this paper. Aggregate liquidity measures are found to well track the history of market liquidity problems. However, market price of liquidity risk, estimated as a coefficient of liquidity shock, does not show any systematic timeseries behavior so we could not find the variables which have significant explanatory power for liquidity risk premium.

  • KEYWORDS

    Liquidity, Liquidity risk, Liquidity risk premium, Liquidity shock