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[ Article ] | |
korean management review - Vol. 53, No. 5, pp. 1087-1115 | |
Abbreviation: kmr | |
ISSN: 1226-1874 (Print) | |
Print publication date 31 Oct 2024 | |
Received 18 Mar 2024 Revised 10 May 2024 Accepted 13 May 2024 | |
DOI: https://doi.org/10.17287/kmr.2024.53.5.1087 | |
Impact of Workplace-related Accidents on the Usage of Negative Words in 10-K Filings | |
Batjargal Bolor-Erdene ; Keumah Jung
| |
(First Author) Seoul National University (jinwoo3399@gmail.com) | |
(Corresponding Author) Seoul National University (kajung@snu.ac.kr)) | |
기업안전이 기업공시의 부정적 단어 선택에 미치는 영향 | |
밭자르갈 ; 정금아
| |
(주저자) 서울대학교 | |
(교신저자) 서울대학교 | |
Copyright 2024 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited. | |
In this study, we examine the association between corporate workplace safety and narrative disclosure. Specifically, we analyze the negative word usage in 10-K filings depending on the injury/illness rates. Using data from the Occupational Safety and Health Administration (OSHA), we find that firms with higher injury/illness rates are less likely to use negative words in their annual reports. Seeking the underlying reasons, we indeed find a higher usage of negative words in 10-K filings and higher rates of injuries, negatively affecting the firm’s future value. Additionally, the tendency to reduce negative words is stronger for firms led by CEOs with higher career concerns. We also find that when firms highly use negative words in their annual reports, it negatively impacts the readability of annual reporting, especially when they are also experiencing a higher number of injuries. Our findings remain robust even after conducting change analysis, propensity score matching, entropy balancing, and various fixed effects. Overall, our results suggest workplace safety practices influence its annual reports, and managers may strategically use their narratives to mitigate adverse impact from injury/illness in their workplace.
Keywords: Firm value, Negative words, Reputation concern, Workplace-related accidents, Workplace safety |
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∙ The author, Batjargal, graduated from the National University of Mongolia with a Bachelor’s degree in Business Administration in 2015 and a Master’s degree in Business Administration in 2017. In 2019, he completed a program at the Korean Language Center at Korea University. More recently, he earned a Ph.D. in Accounting from Seoul National University. His primary research interests include financial accounting, managerial accounting, and auditing.
∙ The author Keumah Jung is a doctoral candidate at the business school of Seoul National University. She holds a bachelor’s degree from Peking University and a master’s degree from Indiana University Bloomington. Her research mainly focuses on corporate disclosure, financial reporting, and text-based analysis.