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The Value Relevance of Disclosing a Single Corporate Target

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Author Info
Kees Cools () (University of Groningen, and The Boston Consulting Group)
C. Mirjam van Praag () (Faculty of Economics and Econometrics, University of Amsterdam)
Abstract

This paper explores the relationship between disclosing corporate targets and value creation. Our empirical results show the value relevance of voluntarily disclosing a low number of targets, whereas there is a clear additional positive effect of disclosing exactly one corporate target in the annual report. Moreover, the value relevance of “rolling out” a single target to the business unit level in organizations is confirmed by our survey research among the same set of companies. These results support our Accountability Principle and Jensen’s (2002) argument that “purposeful behavior requires a single-valued objective function”.

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Publisher Info
Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 03-049/3.

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Date of creation: 13 Jun 2003
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Handle: RePEc:dgr:uvatin:20030049

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Web page: http://www.tinbergen.nl/

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Related research
Keywords: targets; organizational purpose; objective; value creation; incentives; disclosure.;

Find related papers by JEL classification:
L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
G30 - Financial Economics - - Corporate Finance and Governance - - - General
M40 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - General

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