The role of information and financial reporting in corporate governance and debt contracting
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Weber_Role of information.pdf
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586.39 KB
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9e5738f605e17f3cdbc3b9297144095c
Author(s)
Armstrong, Christopher S.
Guay, Wayne R.
Weber, Joseph P.
Date Issued
October 2010
Journal
Journal of Accounting and Economics
Citation
Armstrong, Christopher S., Wayne R. Guay, and Joseph P. Weber. “The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting.” Journal of Accounting and Economics 50, no. 2–3 (December 2010): 179–234.
Version
Author's final manuscript
Abstract
We review recent literature on the role of financial reporting transparency in reducing governance-related agency conflicts among managers, directors, and shareholders, as well as in reducing agency conflicts between shareholders and creditors, and offer researchers some suggested avenues for future research. Key themes include the endogenous nature of debt contracts and governance mechanisms with respect to information asymmetry between contracting parties, the heterogeneous nature of the informational demands of contracting parties, and the heterogeneous nature of the resulting governance and debt contracts. We also emphasize the role of a commitment to financial reporting transparency in facilitating informal multiperiod contracts among managers, directors, shareholders, and creditors.
MIT Department
Sloan School of Management
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Creative Commons Attribution-Noncommercial-NoDerivatives
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DOI of Published Version
https://doi.org/10.1016/j.jacceco.2010.10.001
