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How does financial reporting quality relate to investment efficiency?

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dc.contributor.author Biddle, Gary C.
dc.contributor.author Hilary, Gilles
dc.contributor.author Verdi, Rodrigo
dc.date.accessioned 2011-08-18T20:20:14Z
dc.date.available 2011-08-18T20:20:14Z
dc.date.issued 2009-09
dc.date.submitted 2009-07
dc.identifier.issn 0165-4101
dc.identifier.uri http://hdl.handle.net/1721.1/65333
dc.description.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. en_US
dc.language.iso en_US
dc.publisher Elsevier en_US
dc.relation.isversionof http://dx.doi.org/10.1016/j.jacceco.2009.09.001 en_US
dc.rights Creative Commons Attribution-Noncommercial-Share Alike 3.0 en_US
dc.rights.uri http://creativecommons.org/licenses/by-nc-sa/3.0/ en_US
dc.source SSRN en_US
dc.title How does financial reporting quality relate to investment efficiency? en_US
dc.type Article en_US
dc.identifier.citation Biddle, Gary C., Gilles Hilary, and Rodrigo S. Verdi. “How Does Financial Reporting Quality Relate to Investment Efficiency?.” Journal of Accounting and Economics 48.2-3 (2009) : 112-131. Copyright © 2009, Elsevier en_US
dc.contributor.department Sloan School of Management en_US
dc.contributor.approver Verdi, Rodrigo
dc.contributor.mitauthor Verdi, Rodrigo
dc.relation.journal Journal of Accounting and Economics en_US
dc.identifier.mitlicense OPEN_ACCESS_POLICY en_US
dc.eprint.version Author's final manuscript en_US
dc.type.uri http://purl.org/eprint/type/JournalArticle en_US
eprint.status http://purl.org/eprint/status/PeerReviewed en_US
dspace.orderedauthors Biddle, Gary C.; Hilary, Gilles; Verdi, Rodrigo S. en


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