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https://openaccess.city.ac.uk/id/eprint/16502/1/Marking_to_Market_and_Inefficient_Investment_Decisions_FULL_INFO_14June2016.pdf
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Journal article
Marking to Market and Inefficient Investment Decisions
Management science, v 64(8), pp 3756-3771
01 Aug 2018
Abstract
We examine how mark-to-market accounting affects the investment decisions of managers with reputation concerns. Reporting the current market value of a firm's assets can help mitigate agency problems because it provides outsiders (e.g., shareholders) with new information against which the management's decisions can be evaluated. However, the fact that the assets' market value is informative can also have a negative side effect: managers may shy away from investments that indicate conflicting private information and would damage their reputation. This effect can lead to inefficient investment decisions and make marking to market less desirable when market prices are more informative.
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Details
- Title
- Marking to Market and Inefficient Investment Decisions
- Creators
- Clemens A. Otto - HEC Paris, F-78350 Jouy En Josas, FrancePaolo F. Volpin - City, University of London
- Publication Details
- Management science, v 64(8), pp 3756-3771
- Publisher
- Informs
- Number of pages
- 16
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000440922200016
- Scopus ID
- 2-s2.0-85051400197
- Other Identifier
- 991021861863804721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Management
- Operations Research & Management Science