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- Title
Are CEOs incentivized to shelter good information?
- Authors
Feng, Hongrui; Jia, Yuecheng
- Abstract
Prior theoretical studies on the agency problem hold different opinions from the empirical literature on two questions: (a) Are CEOs incentivized to shelter good information? (b) Are CEOs incentivized to evenly shelter good and bad information? This paper demonstrates that CEOs with high pay‐performance incentives tend to successfully shelter good information rather than bad information. Furthermore, CEOs with high pay‐performance incentives shelter good information by using real earnings management and textual manipulation but not accrual‐based earnings management. These asymmetric information manipulation behaviors help to decrease corporate cash flow volatility as well as the jump and crash risk on the stock market.
- Subjects
CHIEF executive officers; FINANCIAL crises; EARNINGS management; HELPING behavior; INFORMATION-seeking behavior
- Publication
Financial Review, 2021, Vol 56, Issue 1, p109
- ISSN
0732-8516
- Publication type
Article
- DOI
10.1111/fire.12249