The Effects of Financial Reporting and Disclosure on Corporate Investment: A Review
82 Pages Posted: 3 Aug 2019
Date Written: July 30, 2019
A fundamental question in accounting is whether and to what extent financial reporting facilitates the allocation of capital to the right investment projects. Over the last two decades, a large and growing body of literature has contributed to our understanding of whether and why financial reporting affects investment decision-making. We review the empirical literature on this topic, provide a framework to organize this literature, and highlight opportunities for future research.
Keywords: financial accounting, disclosure, real effects, investment, M&A, capital budgeting, agency frictions
JEL Classification: D82, M4, M41, G31
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