Abstract: Prior 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. Copyright &y& Elsevier
%0 Journal Article
%1 4506763320091201
%A Biddle, Gary C.
%A Hilary, Gilles
%A Verdi, Rodrigo S.
%D 2009
%J Journal of Accounting & Economics
%K CREF5 Monahan
%N 2/3
%P 112 - 131
%T How does financial reporting quality relate to investment efficiency?.
%U http://ezproxy.insead.edu:80/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=45067633&site=ehost-live
%V 48
%X Abstract: Prior 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. Copyright &y& Elsevier
@article{4506763320091201,
abstract = {Abstract: Prior 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. [Copyright &y& Elsevier]},
added-at = {2010-03-29T13:44:28.000+0200},
author = {Biddle, Gary C. and Hilary, Gilles and Verdi, Rodrigo S.},
biburl = {https://www.bibsonomy.org/bibtex/2fbffda3077d4dea68ad774525c2e8985/dwpeg},
interhash = {bf1edd15ba1f0220655db1626d604d66},
intrahash = {fbffda3077d4dea68ad774525c2e8985},
issn = {01654101},
journal = {Journal of Accounting & Economics},
keywords = {CREF5 Monahan},
number = {2/3},
pages = {112 - 131},
timestamp = {2010-03-29T13:44:29.000+0200},
title = {How does financial reporting quality relate to investment efficiency?.},
url = {http://ezproxy.insead.edu:80/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=45067633&site=ehost-live},
volume = 48,
year = 2009
}