Financial statement comparability and managers’ use of corporate resources
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
Author(s)
Related Research Unit(s)
Detail(s)
Original language | English |
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Pages (from-to) | 1697-1742 |
Journal / Publication | Accounting and Finance |
Volume | 61 |
Issue number | S1 |
Online published | 15 Apr 2020 |
Publication status | Published - Apr 2021 |
Link(s)
Abstract
We examine the impact of financial statement comparability on managers’ use of corporate resources. Using the comparability measures of De Franco, Kothari, and Verdi as proxies for financial statement comparability, we find that, as comparability increases, corporate cash holdings are worth more to outside shareholders, capital expenditure contributes more to shareholder value, and corporate acquisitions made by the firm have a more favourable impact on shareholder value. We also find that higher comparability leads to both lower under- and overinvestment. Our results suggest that comparability facilitates investor monitoring of managers’ use of corporate resources, which enhances shareholder value.
Research Area(s)
- Acquisitions, Capital expenditure, Cash holdings, Financial statement comparability, Shareholder value
Bibliographic Note
Full text of this publication does not contain sufficient affiliation information. With consent from the author(s) concerned, the Research Unit(s) information for this record is based on the existing academic department affiliation of the author(s).
Citation Format(s)
Financial statement comparability and managers’ use of corporate resources. / Kim, Jeong-Bon; Li, Leye; Lu, Louise Yi et al.
In: Accounting and Finance, Vol. 61, No. S1, 04.2021, p. 1697-1742.Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review