Words Speak Louder without Actions

• 成果类型: Article
• 署名作者: Levit, Doron
• 署名单位: University of Pennsylvania; European Corporate Governance Institute
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12834
• 发表日期: 2020
• 页码: 91-131
• 关键词: CORPORATE GOVERNANCE; authority; COMMUNICATION; leadership; FIRMS; SHAREHOLDERS; decisions

摘要

Information and control rights are central aspects of leadership, management, and corporate governance. This paper studies a principal-agent model that features both communication and intervention as alternative means to exert influence. The main result shows that a principal's power to intervene in an agent's decision limits the ability of the principal to effectively communicate her private information. The perverse effect of intervention on communication can harm the principal, especially when the cost of intervention is low or the underlying agency problem is severe. These novel results are applied to managerial leadership, corporate boards, private equity, and shareholder activism.