Corporate governance roles of information quality and corporate takeovers

• 成果类型: Article
• 署名作者: Li, Jing; Nan, Lin; Zhao, Ran
• 署名单位: University of Hong Kong; Purdue University System; Purdue University; Chapman University System; Chapman University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-018-9449-z
• 发表日期: 2018
• 页码: 1207-1240
• 关键词: accounting information; market power; performance; disclosure; mergers; gains; conservatism; OWNERSHIP; WEALTH; POISON

摘要

We examine the corporate governance roles of information quality and the takeover market with asymmetric information regarding the value of the target firm. Increasing information quality improves the takeover efficiency however, a highly efficient takeover market also discourages the manager from exerting effort. We find that perfect information quality is not optimal for either current shareholders' expected payoff maximization or expected firm value maximization. Furthermore, current shareholders prefer a lower level of information quality than the level that maximizes expected firm value, because of a misalignment between current shareholders' value and total firm value. We also analyze the impact of antitakeover laws, and find that the passage of antitakeover laws may induce current shareholders to choose a higher level of information quality and thus increase expected firm value.