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Article: How does financial reporting quality relate to investment efficiency?

TitleHow does financial reporting quality relate to investment efficiency?
Authors
KeywordsCapital investment
Financial reporting quality
Issue Date2009
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jae
Citation
Journal Of Accounting And Economics, 2009, v. 48 n. 2-3, p. 112-131 How to Cite?
AbstractPrior evidence that higher-quality financial reporting improves capital investment efficiency leaves unaddressed whether it reduces over- or under-investment. This study provides evidence of both in documenting a conditional negative (positive) association between financial reporting quality and investment for firms operating in settings more prone to over-investment (under-investment). Firms with higher financial reporting quality also are found to deviate less from predicted investment levels and show less sensitivity to macro-economic conditions. These results suggest that one mechanism linking reporting quality and investment efficiency is a reduction of frictions such as moral hazard and adverse selection that hamper efficient investment. © 2009 Elsevier B.V. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/128993
ISSN
2015 Impact Factor: 3.535
2015 SCImago Journal Rankings: 6.834
SSRN
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorBiddle, GCen_HK
dc.contributor.authorHilary, Gen_HK
dc.contributor.authorVerdi, RSen_HK
dc.date.accessioned2010-12-09T03:05:30Z-
dc.date.available2010-12-09T03:05:30Z-
dc.date.issued2009en_HK
dc.identifier.citationJournal Of Accounting And Economics, 2009, v. 48 n. 2-3, p. 112-131en_HK
dc.identifier.issn0165-4101en_HK
dc.identifier.urihttp://hdl.handle.net/10722/128993-
dc.description.abstractPrior evidence that higher-quality financial reporting improves capital investment efficiency leaves unaddressed whether it reduces over- or under-investment. This study provides evidence of both in documenting a conditional negative (positive) association between financial reporting quality and investment for firms operating in settings more prone to over-investment (under-investment). Firms with higher financial reporting quality also are found to deviate less from predicted investment levels and show less sensitivity to macro-economic conditions. These results suggest that one mechanism linking reporting quality and investment efficiency is a reduction of frictions such as moral hazard and adverse selection that hamper efficient investment. © 2009 Elsevier B.V. All rights reserved.en_HK
dc.languageengen_US
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jaeen_HK
dc.relation.ispartofJournal of Accounting and Economicsen_HK
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectCapital investmenten_HK
dc.subjectFinancial reporting qualityen_HK
dc.titleHow does financial reporting quality relate to investment efficiency?en_HK
dc.typeArticleen_HK
dc.identifier.emailBiddle, GC: biddle@hku.hken_HK
dc.identifier.authorityBiddle, GC=rp00230en_HK
dc.description.naturepostprinten_US
dc.identifier.doi10.1016/j.jacceco.2009.09.001en_HK
dc.identifier.scopuseid_2-s2.0-70350404649en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-70350404649&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume48en_HK
dc.identifier.issue2-3en_HK
dc.identifier.spage112en_HK
dc.identifier.epage131en_HK
dc.identifier.isiWOS:000272060200002en_US
dc.publisher.placeNetherlandsen_HK
dc.identifier.ssrn1146536-
dc.identifier.scopusauthoridBiddle, GC=6701761934en_HK
dc.identifier.scopusauthoridHilary, G=6505892271en_HK
dc.identifier.scopusauthoridVerdi, RS=12801334700en_HK
dc.identifier.citeulike5826404-

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