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effect of risk-taking incentives on both the magnitude and composition of firm risk. We find that when the incentive design …
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effect of risk-taking incentives on both the magnitude and composition of firm risk. We find that when the incentive design …
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This paper analyzes the determinants of governance transparency. In our model, entrepreneurs optimally decide the precision of their earning reporting by trading off the possibility of expropriating profits against the capacity to attract external funding.We find that information is only...
Persistent link: https://www.econbiz.de/10009756942
Incentive compensation induces correlation between the portfolio of managers and the cash flow of the firms they manage …. This correlation exposes managers to risk and hence gives them an incentive to hedge against the poor performance of their …
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