This study examines how U.S.-listed firms' asset redeployability affects their labor investment efficiency and documents a negative relationship between asset redeployability and labor investment efficiency. Asset redeployability increases overinvestment in labor in the forms of over-hiring and under-firing and provides managers more opportunities to conduct earnings management, which reduces financial reporting quality, readability, and comparability, thereby harming labor investment efficiency. Furthermore, our additional results indicate that the negative impact of asset redeployability on labor investment efficiency is mitigated for firms that have a higher degree of unionization, employ more skilled labor, or implement better corporate governance practices.

This research investigates the impact of cyberattacks on tax aggressiveness using a difference-in-differences analysis with a matched sample. We find that firms experiencing cyberattacks are more likely to have lower cash effective tax rates and greater discretionary book-tax differences. We further show that cyberattacks have a greater impact on corporate tax aggressiveness when firms are more exposed to financial distress. Additional analyses show tax aggressiveness increases less when firms are in states with enactments of notification laws and firms with ex ante higher cybersecurity investment. Our aggregate results suggest that firms take more tax risky positions in response to greater financial distress and information asymmetry, which are attributed to the consequences of cyberattacks.

This research empirically examines how customer concentration affects stock market liquidity of supplier firms. We find that firms with a concentrated customer base are strongly and positively associated with stock market liquidity, which is robust to a battery of model specifications and endogeneity issues. The positive relationship between customer concentration and liquidity is concentrated among firms with relatively small size, high financial constraints, and high information asymmetry. Further analyses provide supportive evidence on the monitoring role of principal customers in improving firms’ stock liquidity. Overall, these findings suggest that relationships with principal customers serve as valuable signals for the underlying quality of firms, and thus firms in such relationships are able to achieve favorable economic outcomes.