Identifier

etd-09032013-151841

Degree

Doctor of Philosophy (PhD)

Department

Accounting

Document Type

Dissertation

Abstract

Prior literature suggests that a focus on employee and customer relations alone improves financial performance. However, I find that a focus on employee and customer relations alone is not related to higher earnings persistence, but rather I hypothesize and find that the alignment of employee and customer relations with competitive strategy is related to higher earnings persistence. I further explore this relation by examining the contextual environment in which the firm operates. I consider the moderating variables of firm size, leverage, growth, and corporate governance and find that alignment impacts the persistence of earnings for leverage and governance but not for firm size or growth. I then examine the relation between a firm’s alignment and the market’s reaction to the firm’s reported earnings. The analysis suggests that alignment is critical for cost leaders but is relatively less important for differentiators. Taken as a whole the findings suggest that firm alignment plays a role in earnings quality and is useful to investors in their interpretation of earnings.

Date

2013

Document Availability at the Time of Submission

Release the entire work immediately for access worldwide.

Committee Chair

Tiras, Samuel

Included in

Accounting Commons

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