Abstract

http://ssrn.com/abstract=1571138
 
 

References (312)



 
 

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The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting


Chris Armstrong


University of Pennsylvania - Accounting Department

Wayne R. Guay


University of Pennsylvania - Accounting Department

Joseph Weber


Massachusetts Institute of Technology (MIT) - Sloan School of Management

September 30, 2010


Abstract:     
We review recent literature on the role of financial reporting transparency in reducing governance-related agency conflicts among managers, directors, and shareholders, as well as in reducing agency conflicts between shareholders and creditors, and offer researchers some suggested avenues for future research. Key themes include the endogenous nature of debt contracts and governance mechanisms with respect to information asymmetry between contracting parties, the heterogeneous nature of the informational demands of contracting parties, and the heterogeneous nature of the resulting governance and debt contracts. We also emphasize the role of a commitment to financial reporting transparency in facilitating informal multi-period contracts among managers, directors, shareholders, and creditors.

Number of Pages in PDF File: 174

Keywords: financial accounting, corporate governance, board structure, contracting, executive compensation, debt contracts, informal contracts

JEL Classification: G24, M41

working papers series


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Date posted: March 21, 2010 ; Last revised: November 16, 2011

Suggested Citation

Armstrong, Chris and Guay, Wayne R. and Weber, Joseph, The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting (September 30, 2010). Available at SSRN: http://ssrn.com/abstract=1571138 or http://dx.doi.org/10.2139/ssrn.1571138

Contact Information

Chris S. Armstrong
University of Pennsylvania - Accounting Department ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Wayne R. Guay (Contact Author)
University of Pennsylvania - Accounting Department ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States
215-898-7775 (Phone)
215-573-2054 (Fax)

Joseph Peter Weber
Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )
77 Massachusetts Ave.
E62-416
Cambridge, MA 02142
United States
617-253-4310 (Phone)
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