Incentives for Information Production
The simple argument that all information, whether good or bad, is released.
What is the disclosure principal?
This type of information asymmetry can involve insider trading.
What is adverse selection?
This type of information, if released, would affect the future cash flows of the firm that released it.
What is proprietary information?
This variable was found to have a negative relationship with income-increasing ALLP.
What is accounting enforcement?
This type of incentive relates to managing relationships between a firm and other parties, such as managers and lenders.
What is a contractual incentive?
This type of information asymmetry involves the inability to observe managerial effort.
What is moral hazard?
This type of information, if released, does not affect the future cash flows of the firm that released it.
What is non-proprietary information?
This party is generally concerned about transparent financial reporting that reflects true economic performance.
Who are accounting standard setters?
This term refers to a way managers can reveal a firm’s quality without the disclosure of heavy details.
What is signalling?
A lack of this concept can involve individuals (or groups of individuals) valuing things differently.
What is unanimity?
This refers to information being characterized by the amount of detail or thoroughness that is provided.
What is finer information?
This party, allowed bank managers to build higher loan loss reserves (particularly in the pre-crisis period).
Who are bank regulators?
This market evaluates manager performance and may incentivize managers to disclose truthful, unbiased information as releasing false information may damage their reputation.
What is the managerial labour market?
This concept refers to the benefits an individual or firm receives from an externality, at little or no cost.
What is free-riding?
This refers to information being characterized by the amount of supplementary information provided by accountants or others.
What is additional information?
Official supervisory power is one of three factors used to measure this specific variable.
What is bank regulation?
This market creates an incentive for managers to release information because more information increases investor confidence in the firm which can either cause an increase in the firm’s share price or a decrease in the firm’s cost of capital.
What is the capital market?
This concept describes when an action is taken by a firm that imposes costs or benefits on others. In addition, the firm imposing the action is not charged or does not receive revenue from imposing costs or benefits on others.
What is an externality?
The essence of this concept is that the receiver knows that the supplier of information has an incentive to disclose truthfully.
What is credibility?
In contrast to the pre-crisis period, Maso et al. found a positive association between accounting enforcement and this variable in the post-crisis period.
What is income-decreasing ALLP?