The Information Content of Corporate Pension Funding Status in Japan

Shingo Goto, Noriyoshi Yanase

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


This paper tests if a firm's pension funding ratio (pension assets/PBO) reveals the management's private information about the firm's operation when the firm can exercise discretion in pension funding. The lax enforcement of pension funding rules and the prevalence of management forecasts make Japanese firms an ideal testing ground. We show that, among firms with large business uncertainty, large accruals, or high effective tax rates, the pension funding ratio predicts the firm's management forecast errors significantly beyond conventional control variable and the effects of pension accounting management. However, the stock market does not appear to incorporate this information immediately.

Original languageEnglish
Pages (from-to)903-949
Number of pages47
JournalJournal of Business Finance and Accounting
Issue number7-8
Publication statusPublished - 2016 Jul 1
Externally publishedYes


  • corporate pensions
  • cross-sectional predictability
  • japanese stock market
  • management forecasts
  • market efficiency
  • measurement errors
  • pension accounting management
  • pension funding

ASJC Scopus subject areas

  • Accounting
  • Business, Management and Accounting (miscellaneous)
  • Finance


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