Journal ArticleDOI
Signalling and Mimicry: The Evidence from Firm Goal Definition
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TLDR
In this paper, the authors test the mimicking propositions from signalling theory as they relate to stated firm objectives and firm performance and find that poorly performing firms more frequently cite shareholder wealth maximization as their primary objective than do better performing firms.Abstract:
This paper tests the mimicking propositions from signalling theory as they relate to stated firm objectives and firm performance. We classify the corporate objectives of a large sample of firms and evaluate firm performance relative to these objectives. We find that poorly performing firms more frequently cite shareholder wealth maximization as their primary objective than do better performing firms. There is no evidence that firms citing a shareholder wealth maximization objective perform any better than firms with alternative objectives. Similar evidence is found for other common corporate objectives. Overall, our results are consistent with signalling theory in that non‐enforceable signals, such as proclamations of corporate objectives, are not credible signals for investors.read more
Citations
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The impact of organizational commitment, senior management involvement, and team involvement on strategic information systems planning
TL;DR: A postal survey about planning practices and objectives produced usable data from 105 corporate information systems planners, and senior management involvement predicted the achievement of the objectives in a positive manner whereas organizational commitment predicted it in an inverted-U relationship.
Journal ArticleDOI
Factors that Determines the Success of Business Demon Value Added Management
TL;DR: In this article, the authors provide a comprehensive indication of the business demon value added management (BDVAM) as a form of Politics Governance Responsibility (PGR), by reviewing some relevant literature related to the five main areas of BDVAM.
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Does placement sequencing of the auditor’s report in malaysian companies’ annual reports matter?
TL;DR: In this article, the authors investigated whether a firm's management decision to locate the auditor's report in the financial statements is explained by information signaling theory and found that a firm that conveys good news is more likely to place its auditor report at the beginning of the financial statement than at the end, and vice-versa.
References
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Journal ArticleDOI
Theory of the firm: Managerial behavior, agency costs and ownership structure
TL;DR: In this article, the authors draw on recent progress in the theory of property rights, agency, and finance to develop a theory of ownership structure for the firm, which casts new light on and has implications for a variety of issues in the professional and popular literature.
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Corporate financing and investment decisions when firms have information that investors do not have
TL;DR: In this paper, a firm that must issue common stock to raise cash to undertake a valuable investment opportunity is considered, and an equilibrium model of the issue-invest decision is developed under these assumptions.
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Informational asymmetries, financial structure, and financial intermediation
TL;DR: This paper argued that the average quality is likely to be low, with the consequence that even projects which are known (by the entrepreneur) to merit financing cannot be undertaken because of the high cost of capital resulting from low average project quality.
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The determination of financial structure: the incentive-signalling approach
TL;DR: In this paper, the authors show that if managers possess inside information about the activities of firms, then the choice of a managerial incentive schedule and of a financial structure signals information to the market, and in competitive equilibrium the inferences drawn from the signals will be validated.
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Risk reduction as a managerial motive for conglomerate mergers
Yakov Amihud,Baruch Lev +1 more
TL;DR: In this article, a manager's motivation for a conglomerate merger is investigated. And the authors show that managers engage in conglomerate mergers to decrease their largely undiversifiable "employment risk" (i.e., risk of losing job, professional reputation, etc.).