CEO Confidence and Unreported R&D

• 成果类型: Article
• 署名作者: Koh, Ping-Sheng; Reeb, David M.; Zhao, Wanli
• 署名单位: ESSEC Business School; National University of Singapore; Southern Illinois University System; Southern Illinois University; Renmin University of China
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2017.2809
• 发表日期: 2018
• 页码: 5725-5747
• 关键词: innivation; overconfident CEOs; missimg R&D; MANDATORY DISCLOSURE; corporate opacity

摘要

We investigate whether managerial traits influence corporate decisions to provide mandatory financial disclosures. The results indicate that firms with confident chief executive officers (CEOs) are 24% more likely to report their research and development (R&D) expenditures relative to firms with cautious CEOs. Exploiting staggered, state-level regulatory shocks and changes in CEO type, we find substantial evidence that cautious CEO firms fail to report R&D expenditures. After a plausibly exogenous shock to managerial reporting liability, cautious CEO firms exhibit a 35% larger reduction in unreported R&D relative to confident CEO firms. Interestingly, confident CEO firms do not exhibit more innovation than their cautious CEO counterparts after taking into account their differing propensities to report corporate R&D. Overall, our analysis suggests that the precision or reliability of mandatory disclosures systematically varies with managerial characteristics.