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The Fundamental Agency Problem: Ownership, Monitoring, and Voluntary Disclosure

Jankensgård, Håkan LU (2015)
Abstract
Combining databases with unique strengths I show that stray firms, i.e. those lacking a controlling owner, have lower disclosure in financial reports. This finding illustrates managers’ preference to withhold information (“the fundamental agency problem”). I contribute to the literature by showing that, while monitoring by blockholders initially increases disclosure, disclosure decreases at high levels of block ownership. At high levels blockholders appear to lose interest in public disclosure as their access to information is virtually guaranteed. Moreover, I report findings on the impact of institutional, foreign, under-diversified, and controlling minority-owners, concluding that ownership structure has major implications for voluntary... (More)
Combining databases with unique strengths I show that stray firms, i.e. those lacking a controlling owner, have lower disclosure in financial reports. This finding illustrates managers’ preference to withhold information (“the fundamental agency problem”). I contribute to the literature by showing that, while monitoring by blockholders initially increases disclosure, disclosure decreases at high levels of block ownership. At high levels blockholders appear to lose interest in public disclosure as their access to information is virtually guaranteed. Moreover, I report findings on the impact of institutional, foreign, under-diversified, and controlling minority-owners, concluding that ownership structure has major implications for voluntary disclosure. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Working Paper
publication status
submitted
subject
keywords
Voluntary disclosure, ownership, monitoring, agency costs, block ownership
language
English
LU publication?
yes
id
272ed1bb-70b7-422c-977b-7eb38bfbda77 (old id 7988427)
date added to LUP
2015-09-23 11:26:58
date last changed
2016-04-16 11:48:10
@misc{272ed1bb-70b7-422c-977b-7eb38bfbda77,
  abstract     = {Combining databases with unique strengths I show that stray firms, i.e. those lacking a controlling owner, have lower disclosure in financial reports. This finding illustrates managers’ preference to withhold information (“the fundamental agency problem”). I contribute to the literature by showing that, while monitoring by blockholders initially increases disclosure, disclosure decreases at high levels of block ownership. At high levels blockholders appear to lose interest in public disclosure as their access to information is virtually guaranteed. Moreover, I report findings on the impact of institutional, foreign, under-diversified, and controlling minority-owners, concluding that ownership structure has major implications for voluntary disclosure.},
  author       = {Jankensgård, Håkan},
  keyword      = {Voluntary disclosure,ownership,monitoring,agency costs,block ownership},
  language     = {eng},
  title        = {The Fundamental Agency Problem: Ownership, Monitoring, and Voluntary Disclosure},
  year         = {2015},
}