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SUMMARY:Information versus Investment
DTSTART:20190329T103000
DTEND:20190329T120000
DTSTAMP:20260502T113238Z
UID:45eebd34b2791e1b8bf1f385e7ec6001e37c3c55225ac10581d049ae
CATEGORIES:Conferences - Seminars
DESCRIPTION:Toni WHITED\, Ross School of Business\, University of Michigan
 \nFirms both make long term investments and reveal information about perfo
 rmance. These activities serve crucial roles in the economy and capital ma
 rkets\, yet they are in direct conflict in the presence of realistic manag
 erial incentives to smooth reported performance. To gauge the quantitative
  importance of this tradeoff\, we estimate a dynamic model that captures t
 he tradeoff between investment efficiency and information accuracy. The mo
 del matches a range of observable moments constructed from data on firm in
 vestment and periods of detected misreporting by firms. Managers in our mo
 del distort reported profits on average by 3% of sales. Counterfactual ana
 lysis reveals that eliminating this misreporting through disclosure regula
 tion is possible\, but doing so incentivizes managers to distort real inve
 stment. The result would be around 1% lower firm value on average\, reflec
 ting a quantitatively meaningfully tradeoff.
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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