Spillover Effects of Financial Reporting on Public Firms’ Corporate Investment: Evidence from Structural Estimation
0
조회
0
다운로드
0
인용
0
참고문헌
키워드
초록
I examine whether public firms’ financial reporting has spillover effects on the amount and efficiency of other public firms’ investment and quantify the relative importance of these indirect spillover effects vis-à-vis the direct effects due to firms’ own financial reporting. Using structural estimation, I examine the effect of financial reporting on aggregate output from the public corporate sector’s investment and estimate that a significant portion—roughly half of the total effect of financial reporting and a quarter of the marginal effect of an incremental change in financial reporting precision—is due to spillover effects.
Abstract
I examine whether public firms’ financial reporting has spillover effects on the amount and efficiency of other public firms’ investment and quantify the relative importance of these indirect spillover effects vis-à-vis the direct effects due to firms’ own financial reporting. Using structural estimation, I examine the effect of financial reporting on aggregate output from the public corporate sector’s investment and estimate that a significant portion—roughly half of the total effect of financial reporting and a quarter of the marginal effect of an incremental change in financial reporting precision—is due to spillover effects.
참고문헌 (76)
- Admati, A., "Forcing Firms to Talk : Financial Disclosure Regulation and Externalities", Review of Financial Studies, 13(3), pp.479~519 (2000)
- Andrews, I., "Measuring the Sensitivity of Parameter Estimates to Estimation Moments", Quarterly Journal of Economics, 132(4), pp.1553~1592 (2017)
- Angrist, J., "The Perils of Peer Effects", Labour Economics, 30, pp.98~108 (2014)
- Armstrong, C., "Strategic Reaction in Corporate Tax Planning", Journal of Accounting and Economics, 68(1), pp.101232~ (2019)
- Badertscher, B., "Externalities of Public Firm Presence : Evidence from Private Firms’ Investment Decisions", Journal of Financial Economics, 109(3), pp.682~706 (2013)
- Baginski, S., "Intraindustry Information Transfers Associated with Management Forecasts of Earnings", Journal of Accounting Research, 25(2), pp.196~216 (1987)
- Bazdresch, S., "Estimating and Testing Dynamic Corporate Finance Models", Review of Financial Studies, 31(1), pp.322~361 (2018)
- Beatty, A., "The Spillover Effect of Fraudulent Financial Reporting on Peer Firms’ Investments", Journal of Accounting and Economics, 55(2-3), pp.183~205 (2013)
- Berger, P., "Challenges and Opportunities in Disclosure Research – A Discussion of ‘the Financial Reporting Environment: Review of the Recent Literature’", Journal of Accounting and Economics, 51(1-2), pp.204~218 (2011)
- Bernard, D., "Information Flows Among Rivals and Corporate Investment", Journal of Financial Economics, 136(3), pp.760~779 (2020)
- Bertomeu, J., "How Often Do Managers Withhold Information?", The Accounting Review, 95(4), pp.73~102 (2020)
- Beyer, A., "The Financial Reporting Environment : Review of the Recent Literature", Journal of Accounting and Economics, 50(2), pp.296~343 (2010)
- Biddle, G., "Accounting Quality and Firm-Level Capital Investment", The Accounting Review, 81(5), pp.963~982 (2006)
- Biddle, G., "How Does Financial Reporting Quality Relate to Investment Efficiency?", Journal of Accounting and Economics, 48(2-3), pp.112~131 (2009)
- Bloom, N., "Uncertainty and Investment Dynamics", Review of Economic Studies, 74(2), pp.391~415 (2007)
- Botosan, C., "Disclosure Level and the Cost of Equity Capital", The Accounting Review, 72(3), pp.323~349 (1997)
- Breuer, M., "How Does Financial-Reporting Regulation Affect Market-Wide Resource Allocation?", Journal of Accounting Research, 59(1), pp.59~110 (2021)
- Bustamante, M., "Does Firm Investment Respond to Peers’ Investment?", Management Science, 67(8), pp.4703~4724 (2021)
- Carhart, M., "On Persistence in Mutual Fund Performance", Journal of Finance, 52(1), pp.57~82 (1997)
- Cameron, A., "Robust Inference with Multiway Clustering", Journal of Business and Economic Statistics, 29(2), pp.238~249 (2011)
- Chen, C., "Externalities of Mandatory IFRS Adoption: Evidence from Cross-Border Spillover Effects of Financial Information on Investment Efficiency", The Accounting Review, 88(3), pp.881~914 (2013)
- Chen, H., "Investment-Cash Flow Sensitivity Cannot be a Good Measure of Financial Constraints: Evidence from the Time Series", Journal of Financial Economics, 103(2), pp.393~410 (2012)
- Cheng, M., "Does Investment Efficiency Improve After the Disclosure of Material Weaknesses in Internal Control Over Financial Reporting?", Journal of Accounting Economics, 56(1), pp.1~18 (2013)
- Choi, J., "Accrual Accounting and Resource Allocation : A General Equilibrium Analysis", Journal of Accounting Research, 59(4), pp.1179~1219 (2021)
- Christensen, P., "Information and the Cost of Capital : An Ex Ante Perspective", The Accounting Review, 85(3), pp.817~848 (2010)
- Christensen, P., "Public Information and Efficient Capital Investments : Implications for the Cost of Capital and Firm Values", The Accounting Review, 95(5), pp.57~93 (2020)
- Clinch, G., "Intra-Industry Information Releases : A Recursive Systems Approach", Journal of Accounting and Economics, 9(1), pp.89~106 (1987)
- Durnev, A., "Corporate Investments : Learning from Restatements", Journal of Accounting Research, 47(3), pp.679~720 (2009)
- Durnev, A., "The Spillover Effects of MD&A Disclosures for Real Investment: The Role of Industry Competition", Journal of Accounting and Economics, 70(1), pp.101299~ (2020)
- Information Disclosure, Real Investment, and Shareholder Welfare, "Dutta, S.", ~ (2017)
- Dye, R., "Mandatory Versus Voluntary Disclosures : The Cases of Financial and Real Externalities", The Accounting Review, 65(1), pp.1~24 (1990)
- Dyreng, S., "Long-Run Corporate Tax Avoidance", The Accounting Review, 83(1), pp.61~82 (2008)
- Easley, D., "Information and the Cost of Capital", Journal of Finance, 59(4), pp.1553~1583 (2004)
- Fama, E., "Common Risk Factors in the Returns on Stocks and Bonds", Journal of Financial Economics, 33(1), pp.3~56 (1993)
- Fama, E., "Industry Costs of Equity", Journal of Financial Economics, 43(2), pp.153~193 (1997)
- The Magnitude and Concept of the Equity Premium in 150 Textbooks, "Fernandez, P.", ~ (2011)
- Fischer, P., "Beliefs-Driven Price Association", Journal of Accounting and Economics, 61(2-3), pp.563~583 (2016)
- Foster, G., "Intra-Industry Information Transfers Associated with Earnings Releases", Journal of Accounting and Economics, 3(3), pp.201~232 (1981)
- Gao, P., "Disclosure Quality, Cost of Capital, and Investor Welfare", The Accounting Review, 85(1), pp.1~29 (2010)
- Garman, M., "Information and the Sequential Valuation of Assets in Arbitrage-Free Economies", Journal of Accounting Research, 18(2), pp.420~440 (1980)
- Gipper, B., "Public Audit Oversight and Reporting Credibility : Evidence from the PCAOB Inspection Regime", Review of Financial Studies, 33(10), pp.4532~4579 (2020)
- Gleason, C., "The Contagion Effects of Accounting Restatements", The Accounting Review, 83(1), pp.83~110 (2008)
- Goodman, T., "Management Forecast Quality and Capital Investment Decisions", The Accounting Review, 89(1), pp.331~365 (2014)
- Hail, L., "International Differences in the Cost of Equity Capital: Do Legal Institutions and Securities Regulation Matter?", Journal of Accounting Research, 44(3), pp.485~531 (2006)
- Han, J., "Unexpected Earnings and Intraindustry Information Transfers : Further Evidence", Journal of Accounting Research, 28(1), pp.211~219 (1990)
- Han, J., "Managers’ Earnings Forecasts and Intra-Industry Information Transfers", Journal of Accounting and Economics, 11(1), pp.3~33 (1989)
- Hanlon, M., "A Review of Tax Research", Journal of Accounting and Economics, 50(2-3), pp.127~178 (2010)
- Hennessy, C., "Debt Dynamics", Journal of Finance, 60(3), pp.1129~1165 (2005)
- Hughes, J., "Information Asymmetry, Diversification, and Cost of Capital", The Accounting Review, 82(3), pp.705~729 (2007)
- Kanodia, C., "A Real Effects Perspective to Accounting Measurement and Disclosure : Implications and Insights for Future Research", Journal of Accounting Research, 54(2), pp.623~676 (2016)
- Kaplan, S., "Do Investment-Cash Flow Sensitivities Provide Useful Measures of Financing Constraints?", Quarterly Journal of Economics, 112(1), pp.169~215 (1997)
- Kim, M., "The Ability of Earnings to Predict Future Operating Cash Flows Has Been Increasing—Not Decreasing", Journal of Accounting Research, 43(5), pp.753~780 (2005)
- Koh, P., "Missing R&D", Journal of Accounting and Economics, 60(1), pp.73~94 (2015)
- Lambert, R., "Accounting Information, Disclosure, and the Cost of Capital", Journal of Accounting Research, 45(2), pp.385~420 (2007)
- Leuz, C., "The Economics of Disclosure and Financial Reporting Regulation : Evidence and Suggestions for Future Research", Journal of Accounting Research, 54(2), pp.525~622 (2016)
- Li, V., "Do False Financial Statements Distort Peer Firms’ Decisions?", The Accounting Review, 91(1), pp.251~278 (2016)
- Malmendier, U., "CEO Overconfidence and Corporate Investment", Journal of Finance, 60(6), pp.2661~2700 (2005)
- Manski, C., "Identification of Endogenous Social Effects : The Reflection Problem", Review of Economic Studies, 60(3), pp.531~542 (1993)
- Michaelides, A., "Estimating the Rational Expectations Model of Speculative Storage : A Monte Carlo Comparison of Three Simulation Estimators", Journal of Econometrics, 96(2), pp.231~266 (2000)
- Minnis, M., "Why Regulate Private Firm Disclosure and Auditing?", Accounting and Business Research, 47(5), pp.473~502 (2017)
- Minton, B., "Institutional Investments in Pure Play Stocks and Implications for Hedging Decisions", Journal of Corporate Finance, 37, pp.132~151 (2016)
- Nikolov, B., "Agency Conflicts and Cash : Estimates from a Dynamic Model", Journal of Finance, 69(5), pp.1883~1921 (2014)
- Pastor, L., "Technological Revolutions and Stock Prices", American Economic Review, 99(4), pp.1451~1483 (2009)
- Roychowdhury, S., "The Effects of Financial Reporting and Disclosure on Corporate Investment: A Review", Journal of Accounting and Economics, 68(2-3), pp.101246~ (2019)
- Samuels, D., "The Economics of Misreporting and the Role of Public Scrutiny", Journal of Accounting and Economics, 71(1), pp.101340~ (2021)
- How Does Better Access to Public Firm Disclosures Affect Private Firm Financing?, "Shi, S.", ~ (2021)
- Shroff, N., "Corporate Investment and Changes in GAAP", Review of Accounting Studies, 22(1), pp.1~63 (2017)
- Shroff, N., "When Does the Peer Information Environment Matter?", Journal of Accounting and Economics, 64(2-3), pp.183~214 (2017)
- Shroff, N., "Information Environment and the Investment Decisions of Multinational Corporations", The Accounting Review, 89(2), pp.759~790 (2014)
- Solow, R., "A Contribution to the Theory of Economic Growth", Quarterly Journal of Economics, 70(1), pp.65~94 (1956)
- Strebulaev, I., "Dynamic Models and Structural Estimation in Corporate Finance", Foundations and Trends in Finance, 6(1-2), pp.1~163 (2012)
- Subramanyam, K., "Earnings, Cash Flows, and Ex Post Intrinsic Value of Equity", The Accounting Review, 82(2), pp.457~481 (2007)
- Swan, T., "Economic Growth and Capital Accumulation", Economic Record, 32(2), pp.334~361 (1956)
- Thompson, S., "Simple Formulas for Standard Errors that Cluster by Both Firm and Time", Journal of Financial Economics, 99(1), pp.1~10 (2011)
- "2019 Annual Capital Expenditures Survey" (2021)[URL]
- Zhang, G., "Accounting Standards, Cost of Capital, Resource Allocation, and Welfare in a Large Economy", The Accounting Review, 88(4), pp.1459~1488 (2013)
