RIEBセミナー(TJAR Workshop共催) RIEB Seminar (Jointly supported by: TJAR Workshop)

日時 2016年12月15日(木)午後3時30分から午後5時00分まで
会場 神戸大学経営学研究科 大会議室(本館3階)
対象 教員、院生、および同等の知識をお持ちの方
使用言語 英語
備考 論文のコピーは共同研究推進室にご用意いたします。


報告者 Suil PAE
所属 成均館大学校経営学研究科
論題 Career Concerns, Financial Reporting Quality, and Efficiencies
要旨 This paper shows that when a career-concerned manager makes a costly investment, a tension arises between her incentive to reduce investment (due to the unobservability of investment) and the incentive to increase investment to favorably influence the market perception of her ability. Depending on the magnitude of career concerns, the manager either underinvests or overinvests, relative to the first-case in which investment is observable. Greater career concerns increase (decrease) the equilibrium efficiency if the manager underinvests (overinvests). Higher-quality reporting induces the manager to invest more and thus it increases the equilibrium efficiency in the presence of underinvestment. The second part of the paper extends the model to a setting in which reporting quality is endogenous. We show that the manager adjusts reporting quality to alleviate suboptimal investment. Specifically, the equilibrium reporting quality is higher (lower) than the first-best quality if the manager underinvests (overinvests). We further show that as the manager's career concerns increase, the reporting quality diminishes. This result offers a new explanation for a recent empirical finding: earnings management tends to be more pronounced in the early years of CEO tenure and then diminishes. A broader interpretation of reporting quality to include factors affecting the informativeness of financial reports offers research opportunities to examine the effect of career concerns on managers' choice of those factors.