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Testing for Distortions in Performance Measures: An Application to Residual Income Based Measures like Economic Value Added
Sloof, Randolph; Praag, Mirjam van - Tinbergen Instituut - 2014
.<P> Distorted performance measures in compensation contracts elicit suboptimal behavioral responses that may even prove to be … used class of Residual Income based performance measures —such as Economic Value Added (EVA)— is distorted, leading to … and the self-selection of firms using EVA. Our findings indicate that EVA is a distorted performance measure that elicits …
Persistent link: https://www.econbiz.de/10011257274
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The Degradation of Distorted Performance Measures
Sloof, Randolph; Praag, Mirjam van - Tinbergen Institute - 2008
Baker (2002) has demonstrated theoretically that the quality of performance measures used in compensation contracts … noise and distortion of a performance measure can be measured. Courty and Marschke (2007) have recently developed an elegant … empirical test to detect distortion, based on the degradation of a performance measure subsequent to increasing its weight in …
Persistent link: https://www.econbiz.de/10005137095
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The Degradation of Distorted Performance Measures
Sloof, Randolph; Praag, Mirjam van - Tinbergen Instituut - 2008
Baker (2002) has demonstrated theoretically that the quality of performance measures used in compensation contracts … noise and distortion of a performance measure can be measured. Courty and Marschke (2007) have recently developed an elegant … empirical test to detect distortion, based on the degradation of a performance measure subsequent to increasing its weight in …
Persistent link: https://www.econbiz.de/10011256322
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Accounting conservatism and managerial risk-taking: Corporate acquisitions
Kravet, Todd D. - In: Journal of Accounting and Economics 57 (2014) 2, pp. 218-240
Watts (2003) and Ball and Shivakumar (2005) argue that accounting conservatism decreases managerial incentives to make negative net present value investments. I develop and test a new hypothesis that accounting conservatism is associated with managers making less risky investments. I find that...
Persistent link: https://www.econbiz.de/10011043064
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Implications of power: When the CEO can pressure the CFO to bias reports
Friedman, Henry L. - In: Journal of Accounting and Economics 58 (2014) 1, pp. 117-141
agency model to examine the effects of a CEO׳s power to pressure a CFO to bias a performance measure, like earnings. This …
Persistent link: https://www.econbiz.de/10011043061
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Turbulence, Flexibility and Performance of the Long-lived Small Firm
Power, Bernadette; Reid, Gavin C - Tinbergen Institute - 2003
in Scotland. New measures of flexibility and turbulence are used to explain the performance of mature small firms. These … depend on our unique body of evidence from interviews with owner managers. Performance is measured using a Likert scale over … performance. This is done in two forms. The first involves generalised least squares estimation (with heteroskedastic adjustment …
Persistent link: https://www.econbiz.de/10005137189
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Turbulence, Flexibility and Performance of the Long-lived Small Firm
Power, Bernadette; Reid, Gavin C - Tinbergen Instituut - 2003
in Scotland. New measures of flexibility and turbulence are used to explain the performance of mature small firms. These … depend on our unique body of evidence from interviews with owner managers. Performance is measured using a Likert scale over … performance. This is done in two forms. The first involves generalised least squares estimation (with heteroskedastic adjustment …
Persistent link: https://www.econbiz.de/10011257108
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Gender diversity in corporate boards: Evidence from quota-implied discontinuities
Kuzmina, Olga; Melentyeva, Valentina - 2021
Using data across European corporate boards, we investigate the effects of quota-induced female representation on firm value and operations, under minimal identification assumptions. We consider sharp increases in the share of women on boards that arise due to rounding whenever percentage-based...
Persistent link: https://www.econbiz.de/10012439333
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Incentivizing creativity: A large-scale experiment with tournaments and gifts
Bradler, Christiane; Neckermann, Susanne; Warnke, Arne Jonas - 2016
This paper reports the results from a large-scale laboratory experiment investigating the impact of tournament incentives and wage gifts on creativity. We find that tournaments substantially increase creative output, with no evidence for crowding out of intrinsic motivation. By comparison, wage...
Persistent link: https://www.econbiz.de/10011461715
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Knowing that you matter, matters! The interplay of meaning, monetary incentives, and worker recognition
Kosfeld, Michael; Neckermann, Susanne; Yang, Xiaolan - 2014
interaction effects. While meaning outperforms monetary incentives, the latter have a robust positive effect on performance that …
Persistent link: https://www.econbiz.de/10010427004