Investigating the Impact of Real Earnings Smoothing on the Company\'s Labour Investment Efficiency

Abstract

The purpose of this research is to investigate the impact of real earnings smoothing on labour investment efficiency company's. In order to test the research hypothesis, from financial information 96 firms from listed on Tehran stock Exchange in 2015 – 2022 have been used. The results that real earnings smoothing on abnormal net hiring has a negative and significant effect, which shows that real earnings smoothing lowers deviations of real net hiring away from the expected level. The results obtained from the hypothesis test are in accordance with the signaling theory regarding private information, real earnings smoothing conveys managers' private information about future earnings to stakeholders and by doing so, it reduces the information asymmetry between firms and external capital suppliers and inefficient labour Eventually, real earnings smoothing can help companies achieve high productivity and labour investment efficiency.

Keywords

• real earnings smoothing
• labour investment efficiency
• earnings management
• information asymmetry
• tehran stock exchange