Does Managerial Reporting Still Matter? An Experimental Investigation of Laboratory Hierarchies

Abstract

Over the past several decades, technological advancements in information technology and data science have increasingly enabled firms to produce and distribute information, which challenges long-standing ideas about the role of managerial reporting in firms. We design a series of laboratory hierarchies to examine whether granting reporting responsibility to managers has a purpose beyond eliciting information from managers. Using three experimental treatments, we disentangle the different effects produced by managers' reporting choices, and we establish that granting managers responsibility for reporting may have a purpose beyond the elicitation and distribution of information managers possess. We discuss the implications of our findings for managerial reporting research and practice.

Keywords: multilateral agreements, hierarchy, reporting, disclosure, management, reputation, trust, information asymmetry, hold-up problem

JEL Classification: C92, D91, M40, M41