Corporate Accountability Reporting and High-Profile Misconduct
Year: 2015
Type: article
Abstract: ABSTRACT I investigate whether corporate accountability reporting helps protect firm value. Specifically, I examine (1) whether corporate accountability reporting helps firms prevent the occurrence of high-profile misconduct (e.g., bribery, kickbacks, discrimination), and (2) whether prior corporate accountability reporting reduces the negative stock price reaction when high-profile misconduct does occur. Using multiple methods to address self-selection, I find that, on average, firms that report on their corporate accountability activities are less likely to engage in high-profile misconduct, consistent with the reporting process helping firms to manage their operations better. Additionally, I find that when high-profile misconduct does occur, firms that have previously issued corporate accountability reports experience a less negative stock price reaction, consistent with corporate accountability reports influencing perceptions of managerial intent, which, in turn, influences expected punishments.
Source: The Accounting Review
DOI: 10.2308/accr-51200
Author: Dane M. Christensen
Institution: Pennsylvania State University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2162011391