Mandatory Disclosure as a Solution to Agency Problems

Mahoney, Paul G.

doi:10.2307/1600055

Cited by 169 publications

(96 citation statements)

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“…As a result, the chosen disclosure requirement levels the playing field and diminishes adverse effects of market power (Fishman and Hagerty, 1989). Furthermore, regulatory disclosure requirements can reduce information asymmetries (Hart, 2009) and avoid costs that arise from fraudulent statements (Mahoney, 1995). It could, for instance, centralize previously scattered knowledge of informational remedies against agency conflicts and corporate fraud.…”

Section: Regulatory Solutionmentioning

confidence: 99%

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Financial Statements’ Disclosure in the Electronic Federal Gazette And Proprietary Concerns

Grottke

Löffelmann

Haendel

et al. 2017

rebules

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Abstract:We develop a framework for discussing regulatory activity in the area of differential disclosure systems. In particular, we define differential disclosure systems as being composed of three elements. The first element consists of the pieces of information that are unregulated and, therefore, subject to a market solution. The second element is made up of those pieces of information that are regulated and, therefore, subject to a compulsory disclosure requirement. Finally, the third element is the criteria that determine which pieces are regulated and unregulated for which firms, respectively. To illustrate the usefulness of our framework we examine the repercussions of the Electronic Federal Gazette that was introduced in Germany in 2007. In particular, we present exploratory empirical findings from an online survey of 126 small and medium-sized entities in Bavaria, a federal state of Germany. The survey participants' ultimate judgment of the Electronic Federal Gazette turns out to be negative. They

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Section: Regulatory Solutionmentioning

confidence: 99%

“…Consequently, all users know that there is one channel to access the information needed. Such standardization reduces information acquisition efforts and compliance costs; both lead to market-wide cost savings (Mahoney, 1995).…”

Section: Regulatory Solutionmentioning

confidence: 99%

Financial Statements’ Disclosure in the Electronic Federal Gazette And Proprietary Concerns

Grottke

Löffelmann

Haendel

et al. 2017

rebules

View full text Add to dashboard Cite

show abstract

“…157 Professor Mahoney proposes as an alternative efficiency justification for mandatory securities disclosure reducing the agency costs that arise between investors and promoters and between corporate managers and their shareholders. 158 Both of these justifications of mandatory securities disclosures focus on the cognitive impacts of increased disclosures.…”

Section: Mandatory Securities Disclosuresmentioning

confidence: 99%

Regulating Irrational Exuberance and Anxiety in Securities Markets

Huang

2003

SSRN Journal

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This chapter analyzes the regulatory implications of irrational exuberance and anxiety in securities markets. U.S. federal securities laws mandate the disclosure of certain information, but regulate only the cognitive form and content of that information. An important and unstudied question is how to regulate securities markets where some investors respond not only cognitively to the form and content of information, but also emotionally to the form and content of information. This chapter investigates that question when some investors feel exuberance or anxiety that is unjustified by cognitive processing of the available information. This chapter develops the implications for mandatory securities disclosure of irrational exuberance and anxiety.

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“…This invokes a moral hazard problem. There has been much discussion how and in what way firms are to solve this agency problem (Ross 1973, Gjesdal 1982, Mahoney 1995. A straightforward solution would involve a compensation scheme which provides desirable incentives for the CEO.…”

Section: Introductionmentioning

confidence: 99%

Preaching Water But Drinking Wine? Relative Performance Evaluation in International Banking

2015

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Relative performance evaluation (RPE) is, at least on paper, enjoying widespread popularity in determining the level of executive compensation. Yet existing empirical evidence of RPE is decidedly mixed. Two principal explanations are held responsible for this discord. A constructional challenge arises from intricacies of identifying the correct peers. And on a simpler note, corporate commitments to RPE could be mere exercises in empty rhetoric. We address both issues and test the use of RPE in a new sample of large international non-U.S. banks. Taken as a whole, the banks in our sample show moderate evidence consistent with RPE. We report stronger evidence once we investigate the subsample of banks that disclose the use of peers in their compensation schemes. This finding lends support to the credibility and thus informational value of RPE commitments. Digging deeper, we find that RPE usage is driven by firm size and growth options.

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Mandatory Disclosure as a Solution to Agency Problems

Cited by 169 publications

References 0 publications

Financial Statements’ Disclosure in the Electronic Federal Gazette And Proprietary Concerns

Financial Statements’ Disclosure in the Electronic Federal Gazette And Proprietary Concerns

Regulating Irrational Exuberance and Anxiety in Securities Markets

Preaching Water But Drinking Wine? Relative Performance Evaluation in International Banking

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