ICEF Research Seminar by Alexander Wagner (University of Zurich)
On Thursday, April 5 at 4.40 pm, room 3211 (Shabolovka str. 26) ICEF held the Research Seminar.
Speaker: Alexander Wagner (University of Zurich)
Theme: "Investing in Managerial Honesty" joint with Rajna Gibson, Matthias Sohn and Carmen Tanner
Speaker: Alexander Wagner (University of Zurich)
Theme: "Investing in Managerial Honesty" joint with Rajna Gibson, Matthias Sohn and Carmen Tanner
Abstract: Two laboratory experiments show that investors perceive a CEO to be more committed to honesty when the CEO resisted, at a personal cost, engaging in earnings management. A one standard deviation higher CEO’s perceived commitment to honesty compared to another CEO reduces the relevance, for investment decisions, of differences between the CEOs’ claimed future returns by 40%. This interaction effect is prominent among investors with a pro-self orientation. To pro-social investors, their own honesty values and those attributed to the CEO matter directly, not through the returns. Overall, CEO honesty matters to different investors for distinct reasons.
Date
April 06, 2018
Topics