The primary role of equity compensation is to provide incentives to an effort-averse agent. Here, we show that the chosen level of equity incentives, when publicly disclosed, will also convey information about future earnings, causing two-way linkages between incentive compensation and financial...

In the current business environment organizations are under increased pressure to ensure that they are taking appropriate measures not only in creating value, but also in preserving value. This is required in order to adequately safeguard and defend the interests of their multiple stakeholders....

In this paper, we investigate the effect of shareholder activism on earnings management. Using a US sample of shareholder pay-for-performance proposals sponsored by institutional investors, we find that when compared to control firms, firms targeted by shareholder proposals have a greater...

We examine whether marathon runners exhibit behavior consistent with the assumptions of prospect theory. We test whether round number finishing times (three hours, four hours, etc.) are used as reference points and whether runners increase their effort at the end of the race to avoid the...

This paper treats risky investment projects under adverse selection and considers optimal penalties for erroneous auditing reports that maximize social welfare. These penalties give firms an incentive to choose accounting policies that maximize social welfare. We characterize the optimal...

In 2013, the U.S. Consumer Financial Protection Bureau released a database of consumer complaints filed against banks under its supervision (“CFPB banks”). We find that after the disclosure, rival banks exhibit a greater increase in mortgage approval rates in markets with more intensive...

This study aims to examine the perception of government employees about the association of the culture of compliance in information technology (IT) on the service quality, accountability, and transparency through effective IT governance (ITG) as an intervening variable. This study was carried...

Outsourcing is an efficient way to reduce a company’s costs and is often necessary to remain competitive. However, the practice has had its critics. This article summarizes the outsourcing debate that has been going on in the United States and offers some insights about the practice. Also...

This paper endogenizes coordination problems in organizations by allowing for both ex ante coordination of activities, using rules and task guidelines, and ex post coordination, using communication and broad job assignments. It shows that: (i) Task specialization and the division of labour is...

Innovation in information and communication technology (ICT) fuels the growth of the global economy. How ICT markets evolve depends on politics and policy, and since the 1950s periodic overhauls of ICT policy have transformed competition and innovation. For example, in the 1980s and the 1990s a...