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Managerial Reputation and Corporate Investment Decisions

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Author Info
David Hirshleifer

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Abstract

This review examines the incentives of managers to use investment choices as a tool for building their personal reputations or the reputation of their firms. These incentives come in three main forms: visibility bias, which encourages a manager to try to make short-term indicators of success look better; resolution reference which encourages a manager to try to advance the arrival of good news and delay bad news; and mimicry and avoidence, which encourages a manager to take the actions that the best managers are seen to do, and to avoid the actions the worst managers are seen to do.

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Publisher Info
Article provided by Financial Management Association in its journal Financial Management.

Volume (Year): 22 (1993)
Issue (Month): 2 (Summer)
Pages:
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Handle: RePEc:fma:fmanag:hirshleifer93

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  1. Ammon, Norbert, 1998. "Why Hedge? - A Critical Review of Theory and Empirical Evidence -," ZEW Discussion Papers 98-18, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  2. Han, Bing & Hirshleifer, David & Persons, John, 2007. "Promotion Tournaments and Capital Rationing," MPRA Paper 6496, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  3. Gérard Charreaux, 2000. "L'approche économico-financière de l'investissement: une vision critique," Working Papers FARGO 1000501, Université de Bourgogne - Latec/Fargo (Research center in Finance,organizational ARchitecture and GOvernance). [Downloadable!]
  4. Elena Panova, 2009. "Confirmatory News," Cahiers de recherche 0912, CIRPEE. [Downloadable!]
  5. Gérard Charreaux, 1996. "Pour une véritable théorie de la latitude managériale et du gouvernement des entreprises," Working Papers FARGO 0960601, Université de Bourgogne - Latec/Fargo (Research center in Finance,organizational ARchitecture and GOvernance). [Downloadable!]
  6. Peter Wright & Mark Kroll & Ananda Mukherji & Michael Pettus, 2009. "Do the contingencies of external monitoring, ownership incentives, or free cash flow explain opposing firm performance expectations?," Journal of Management and Governance, Springer, vol. 13(3), pages 215-243, August. [Downloadable!] (restricted)
  7. Simon Grant & Stephen King & Ben Polak, 1995. "Information Externalities, Share-Price Based Incentives and Managerial Behaviour," Cowles Foundation Discussion Papers 1107, Cowles Foundation, Yale University. [Downloadable!]
    Other versions:
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This page was last updated on 2009-11-14.


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