Information Quality and Workplace Safety

Abstract

This paper examines the effect of internal information quality on workplace safety. Using establishment-level data on workplace injuries from the Occupational Safety and Health Administration (OSHA) and employing a strict fixed-effects structure, we show that higher information quality is associated with significantly lower work-related injury rates. Further investigation reveals that the effect is stronger when more decision rights reside in headquarters, weaker when employees have greater bargaining power, and weaker when firms are subject to financial constraints. Our findings are robust to the use of two plausibly exogenous shocks and other robustness checks. Our study suggests an important economic consequence of information quality not examined by prior literature.

Internal Information Quality and Corporate Employment Decisions

“…2018; Hope et al. 2022). Consequently, empirical researchers have attempted to link IIQ with various managerial decisions.…”

“…Therefore, high‐quality internal information can assist managers to improve their decision‐making (Hope et al. 2022). Conversely, failure to do so leads to either overinvestment or underinvestment of resources (Williamson 1963).…”

“…By reducing such an internal information asymmetry, high IIQ helps better coordinate staffing within and across departments (Gallemore and Labro 2015) and allocate workloads efficiently (Hope et al. 2022).…”

“…This requirement can induce managers to gather more internal information, including information related to labour investment (Hope et al. 2022). Using a difference‐in‐differences (DiD) design, we find that firms likely affected by SFAS 158 to a greater extent (as proxied by higher off‐balance‐sheet pension liabilities) exhibit more efficient labour investments after 2006.…”

“…2020), lower work‐related injury rates (Hope et al. 2022), lower cash holdings (Xiong et al. 2021) and tax plans (Gallemore and Labro 2015; McGuire et al.…”