기업 내 노동조합의 존재와 이익 비교가능성의 관계 = The Relationship between Unions and Earnings` Comparability

다국어 초록 (Multilingual Abstract)

This study investigates the relationship between unions and earnings` comparability. In particular, we break down into various situations, such as whether to join the Federation of Korean Trade Unions or the Korean Confederation of Trade Unions, whether the council has been installed, the relative salaries of employees and whether to report profit or loss. So this study investigates unions and earnings` comparability under each of these situations. Unions are organized for the purposed of improvement and empowerment of the working conditions of employees. Unions efforts to improve the working conditions of employees within the firm, and present opinions for the social empowerment of employees from outside the firm. In particular, the improvement of working conditions is a major activity of union, so prior researches have focused on the effect of salary. In other words, they investigated the salary levels with unions and firm`s long(short)-term financial performance. Meanwhile Unions, representing the interests of workers, set the lower limit of the demand for higher salary by considering the growth and sustainability of the firm on the basis of financial statements information. While managers set the upper limit for salary increases acceptance without compromising profitability by using financial statements information. Therefore, financial statements information is available to the appropriate standards to avoid unnecessary strikes in salary negotiations between unions and manager (or firm). In this case, there are incentives to minimize the salary level by using to adjust the comparability of financial statements because financial statements are written by manager and can be affected by manager`s discretion. In other words, manager can block ex ante the demand for higher salary by using to properly adjust the comparability of financial statement because it can present the cause of freezing ore reduction of salaries. Firm`s financial and union data are obtained from financial statements between 2004 and 2008 and they are 2.119 listed firm-years in Korea. Although union data can be collected form 2000 to 2008, sample starts form 2004 because calculations of earnings` comparability need 16 quarters financial data. So empirical result is as follows. First, earnings` comparabilities of the firms with union were relatively low compared to the firms otherwise. Especially earnings` comparabilities of the firms with union joined the Federation of Korean Trade Unions (FKTU) or the Korean Confederation of Trade Unions (KCTU) were low (Associated means that union joined FKTU or KCTU and KCTU means that union joined only KCTU), but the firms with council were rather higher. In this case, higher salary level of employee further reduced earnings` comparability, but lower salary levels had incremental effect of increasing the earning`s comparability. These results were maintained in analysis limited to firms reported profit, but did not appear significant relationships in analysis limited to firms reported loss. This means that there is a significant relationship between unions (or Associated) and earnings` comparability at least. Also, considering different results in salary levels and profit/loss firms, we can assume that earnings` comparability is suitably used in each case. This study has some contributions. First, we focused on earning`s comparability for minimum salary level. Downward adjustment of earnings for minimum salary level (Liberty and Zimmerman 1986; DeAngelo and DeAngelo 1991; Mora and Sabater 2008) can act as a considerable burden on managers (or firms) in terms of low performance. On the other hand, assumption of this study (to lower the earnings` comparability) is to avoid the salary raise, it is advantageous to managers (or firms) in that it dose not need to downward adjustment of earnings. Second, adjusting earnings` comparability by managers can provide important implications for using financial statements information. Therefore, it means that there is a need for active examination of earnings` comparability using financial statements. However union`s endogenous problem is a major limitation of this study. This requires additional studies.