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Article Dans Une Revue Journal of Accounting and Economics Année : 2009

How Does Financial Reporting Quality Relate to Investment Efficiency?

Gary C. Biddle
  • Fonction : Auteur
Rodrigo S. Verdi
  • Fonction : Auteur

Résumé

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 macroeconomic 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.

Dates et versions

hal-00481731 , version 1 (07-05-2010)

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Citer

Gilles Hilary, Gary C. Biddle, Rodrigo S. Verdi. How Does Financial Reporting Quality Relate to Investment Efficiency?. Journal of Accounting and Economics, 2009, vol.48, n°2/3, pp.112-131. ⟨10.1016/j.jacceco.2009.09.001⟩. ⟨hal-00481731⟩

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