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Conference Paper: Do Clawback Provisions influence Capital Investments?
Title | Do Clawback Provisions influence Capital Investments? |
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Authors | |
Issue Date | 2017 |
Publisher | American Accounting Association. |
Citation | American Accounting Association Annual Meeting, San Diego, CA, 5-9 August 2017 How to Cite? |
Abstract | We present evidence that clawback adoptions influence capital investment mix via managerial compensation incentives. Specifically, we find for a propensity-matched sample of 931 voluntary clawback adopters that capital investments shift away from R&D and toward capital expenditures, and toward acquisitions for firms with enabling liquidity, consistent with clawback effects on earnings-linked compensation. Corroborating evidence confirms these effects to be positively related to performance-based pay, growth opportunities, and invariant to risk-toleration incentives, with firms adopting clawbacks also exhibiting capital over-investment. This evidence is timely given a pending SEC rule that would mandate clawbacks for all firms listing on US exchanges. |
Persistent Identifier | http://hdl.handle.net/10722/245808 |
DC Field | Value | Language |
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dc.contributor.author | Joo, JH | - |
dc.contributor.author | Chan, LHL | - |
dc.contributor.author | Biddle, GC | - |
dc.date.accessioned | 2017-09-18T02:17:16Z | - |
dc.date.available | 2017-09-18T02:17:16Z | - |
dc.date.issued | 2017 | - |
dc.identifier.citation | American Accounting Association Annual Meeting, San Diego, CA, 5-9 August 2017 | - |
dc.identifier.uri | http://hdl.handle.net/10722/245808 | - |
dc.description.abstract | We present evidence that clawback adoptions influence capital investment mix via managerial compensation incentives. Specifically, we find for a propensity-matched sample of 931 voluntary clawback adopters that capital investments shift away from R&D and toward capital expenditures, and toward acquisitions for firms with enabling liquidity, consistent with clawback effects on earnings-linked compensation. Corroborating evidence confirms these effects to be positively related to performance-based pay, growth opportunities, and invariant to risk-toleration incentives, with firms adopting clawbacks also exhibiting capital over-investment. This evidence is timely given a pending SEC rule that would mandate clawbacks for all firms listing on US exchanges. | - |
dc.language | eng | - |
dc.publisher | American Accounting Association. | - |
dc.relation.ispartof | American Accounting Association Annual Meeting | - |
dc.title | Do Clawback Provisions influence Capital Investments? | - |
dc.type | Conference_Paper | - |
dc.identifier.email | Joo, JH: jeongjoo@hku.hk | - |
dc.identifier.email | Chan, LHL: lchan@business.hku.hk | - |
dc.identifier.email | Biddle, GC: biddle@hku.hk | - |
dc.identifier.authority | Joo, JH=rp01796 | - |
dc.identifier.authority | Chan, LHL=rp01048 | - |
dc.identifier.authority | Biddle, GC=rp00230 | - |
dc.identifier.hkuros | 277051 | - |
dc.publisher.place | San Diego, CA | - |