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Outside investor access to top management : market monitoring versus stock price manipulation / by Josef Schroth.FB3-5/2020-43E-PDF

"This paper studies the role of voluntary disclosure in crowding out independent research about firm value. In the model, when inside firm owners make it easier for outside investors to obtain inexpensive biased information from the manager, investors rely less on costly unbiased research. As a result, managers are tempted to manipulate the firm stock price more, but investors are better informed because they anticipate manager manipulation. An increase in stock-price informativeness, therefore, has to be traded off against an increase in resources wasted on manipulation. I find that, surprisingly, firm owners grant investors more access to managers that manipulate more strongly. An implication is that the firm cost of capital is negatively related to manager manipulation"--Abstract, page ii.

Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.893100&sl=0

Publication information
Department/Agency
  • Bank of Canada, issuing body.
TitleOutside investor access to top management : market monitoring versus stock price manipulation / by Josef Schroth.
Series title
  • Staff working paper = Document de travail du personnel, 1701-9397 ; 2020-43
Publication typeMonograph - View Master Record
Language[English]
FormatDigital text
Electronic document
Note(s)
  • "Last updated: October 28, 2020."
  • Includes bibliographical references (pages 33-38).
Publishing information
  • Ottawa, Ontario, Canada : Bank of Canada = Banque du Canada, 2020.
  • ©2020
Author / Contributor
  • Schroth, Josef, author.
Description1 online resource (ii, 45 pages) : colour illustrations.
Catalogue number
  • FB3-5/2020-43E-PDF
Subject terms
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