{"title":"Mitigating risk-shifting in corporate pension plans: Evidence from stakeholder constituency statutes","authors":"Amy D. Garman , Thomas R. Kubick","doi":"10.1016/j.jacceco.2024.101704","DOIUrl":null,"url":null,"abstract":"<div><div>We use staggered enactments of state stakeholder constituency laws as a natural experiment to examine the effect of such laws on corporate pension risk shifting. Our analysis encompasses three components of pension risk shifting: funding risk, investment risk, and benefit risk. We observe a reduction in all three elements of pension risk shifting following the enactment of stakeholder orientation laws that promote greater consideration of stakeholder interests. We also find that the post-enactment reduction in pension risk-shifting is greater for firms with fewer investment opportunities. Overall, our results provide insight into how stakeholder constituency can mitigate an important form of risk-shifting.</div></div>","PeriodicalId":48438,"journal":{"name":"Journal of Accounting & Economics","volume":"79 1","pages":"Article 101704"},"PeriodicalIF":5.4000,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Accounting & Economics","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S016541012400034X","RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
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Abstract
We use staggered enactments of state stakeholder constituency laws as a natural experiment to examine the effect of such laws on corporate pension risk shifting. Our analysis encompasses three components of pension risk shifting: funding risk, investment risk, and benefit risk. We observe a reduction in all three elements of pension risk shifting following the enactment of stakeholder orientation laws that promote greater consideration of stakeholder interests. We also find that the post-enactment reduction in pension risk-shifting is greater for firms with fewer investment opportunities. Overall, our results provide insight into how stakeholder constituency can mitigate an important form of risk-shifting.
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The Journal of Accounting and Economics encourages the application of economic theory to the explanation of accounting phenomena. It provides a forum for the publication of the highest quality manuscripts which employ economic analyses of accounting problems. A wide range of methodologies and topics are encouraged and covered: * The role of accounting within the firm; * The information content and role of accounting numbers in capital markets; * The role of accounting in financial contracts and in monitoring agency relationships; * The determination of accounting standards; * Government regulation of corporate disclosure and/or the Accounting profession; * The theory of the accounting firm.
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