Financial reporting quality and the quiet Life by Mihir N. Mehta.
Name
759082508-MIT.pdf
Description
Full printable version
Size
8.6 MB
Format
Adobe PDF
Checksum (MD5)
812d84468d63130fbc7b04d1fe2d5fed
Author(s)
Mehta, Mihir N. (Mihir Nandkishore)
Advisor(s)
S.P. Kothari and Joseph P. Weber.
Date Issued
2010
Publisher
Massachusetts Institute of Technology
Abstract
Bertrand and Mullainathan (2003) find that managers shielded from the threat of takeovers exert less effort to maximize firm value, consistent with a 'quiet life' hypothesis. I study whether the governance role of financial reporting can mitigate adverse effects arising from managerial preferences for a quiet life. I hypothesize and find evidence that after changes in the mid 1990's to Delaware's takeover protection regime, Delaware firms with higher financial reporting quality (FRQ) have better operating performance and higher capital investment intensity. Furthermore, the above relation between FRQ and performance is stronger for firms operating in less competitive industries, and firms with staggered boards. Overall, the results suggest that financial reporting can help mitigate adverse effects associated with managerial preferences for a quiet life.
Description
Thesis (Ph. D.)--Massachusetts Institute of Technology, Sloan School of Management, 2010.
Cataloged from PDF version of thesis.
Includes bibliographical references (p. 61-64).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
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