Journal article

The adverse effect of information on governance and leverage

Abstract:: We study the effect that internal information systems have upon a firm’s leverage and corporate governance choices. Information systems lower governance costs by facilitating more targeted interventions. But they also generate asymmetric information between firms and their investors. As a result, firms may attempt to signal their superior quality by assuming more leverage. In some circumstances, this can reduce governance incentives and result in inferior outcomes. Investors anticipate this effect, and it renders information systems inefficient.

Publication status:: Published

Peer review status:: Peer reviewed

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APA Style

Laux, C., Loranth, G., & Morrison, A. (2017). The adverse effect of information on governance and leverage. Management Science, 64(4), 1510–1527.

MLA Style

Laux, C, et al. “The Adverse Effect of Information on Governance and Leverage.” Management Science, vol. 64, no. 4, 2017, pp. 1510–27.

Chicago Style

Laux, C, G Loranth, and A Morrison. 2017. “The Adverse Effect of Information on Governance and Leverage.” Management Science 64 (4): 1510–27.
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Files:: adverse effect of information on governance.pdf

(Preview, Accepted manuscript, pdf, 639.2KB, Terms of use)

Publisher copy:: 10.1287/mnsc.2016.2599

Authors

+ Laux, C More by this author

Role:: Author

+ Loranth, G More by this author

Role:: Author

+ Morrison, A More by this author

Institution:: University of Oxford
Division:: SSD
Department:: Said Business School
Role:: Author

Publisher:: INFORMS
Journal:: Management Science More from this journal
Volume:: 64
Issue:: 4
Pages:: 1510-1527
Publication date:: 2017-02-21
Acceptance date:: 2016-04-26
DOI:: 10.1287/mnsc.2016.2599
EISSN:: 1526-5501
ISSN:: 0025-1909

Keywords:: governance

internal information systems

leverage
Pubs id:: pubs:632219
UUID:: uuid:8eed5487-1ecc-4c3f-acb2-983689e64903
Local pid:: pubs:632219
Source identifiers:: 632219
Deposit date:: 2016-07-06
ARK identifier:: ark:/29072/ora_8eed54871ecc4c3facb2983689e64903

Terms of use

Copyright holder:: INFORMS
Copyright date:: 2017
Notes:: Copyright © 2017 INFORMS.
This is the accepted manuscript version of the article. The final version is available online from INFORMS at: https://doi.org/10.1287/mnsc.2016.2599

Licence:: Terms and Conditions of Use for Oxford University Research Archive

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