Journal of Accounting and Economics Vol. 79 No. 1 2025
Mitigating risk-shifting in corporate pension plans: Evidence from stakeholder constituency statutes
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.
- DOI
- 10.1016/j.jacceco.2024.101704
- Volume
- 79
- Issue
- 1
- Pages
- 101704
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref