Information-based stock trading, executive incentives, and the principal-agent problem / Qiang Kang in Management science, Vol. 56 N° 4 (Avril 2010)  

Public ISBD [article]  inManagement science > Vol. 56 N° 4 (Avril 2010) . - pp. 682-698 Titre : Information-based stock trading, executive incentives, and the principal-agent problem Type de document : texte imprimé Auteurs : Qiang Kang, Auteur ; Qiao Liu, Auteur Année de publication : 2010 Article en page(s) : pp. 682-698 Note générale : Management Langues : Anglais (eng) Mots-clés : Risk–incentive trade-off Endogenous information-based trading Pay-performance sensitivity Adjusted pin Calibration Index. décimale : 658 Organisation des entreprises. Techniques du commerce Résumé : We examine the role of information-based stock trading in affecting the risk–incentive relation. By incorporating an endogenous informed trading into an optimal incentive contracting model, we analytically show that, apart from reducing incentives, a greater risk increases the level of information-based trading, which consequently enhances executive incentives and offsets the negative risk–incentive relation. We calibrate the model and find that the economic magnitude of this incentive-enhancement effect is significant. Our empirical test using real-world executive compensation data lends strong support to the model prediction. Our results suggest that principals (boards of directors) should consider underlying stock trading characteristics when structuring executive incentives. DEWEY : 658 ISSN : 0025-1909 En ligne : http://mansci.journal.informs.org/content/56/4.toc [article] Information-based stock trading, executive incentives, and the principal-agent problem [texte imprimé] / Qiang Kang, Auteur ; Qiao Liu, Auteur . - 2010 . - pp. 682-698. Management Langues : Anglais (eng) in Management science > Vol. 56 N° 4 (Avril 2010) . - pp. 682-698 Mots-clés : Risk–incentive trade-off Endogenous information-based trading Pay-performance sensitivity Adjusted pin Calibration Index. décimale : 658 Organisation des entreprises. Techniques du commerce Résumé : We examine the role of information-based stock trading in affecting the risk–incentive relation. By incorporating an endogenous informed trading into an optimal incentive contracting model, we analytically show that, apart from reducing incentives, a greater risk increases the level of information-based trading, which consequently enhances executive incentives and offsets the negative risk–incentive relation. We calibrate the model and find that the economic magnitude of this incentive-enhancement effect is significant. Our empirical test using real-world executive compensation data lends strong support to the model prediction. Our results suggest that principals (boards of directors) should consider underlying stock trading characteristics when structuring executive incentives. DEWEY : 658 ISSN : 0025-1909 En ligne : http://mansci.journal.informs.org/content/56/4.toc

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Intellectual capital and financing decisions / Qiao Liu in Management science, Vol. 57 N° 10 (Octobre 2011)  

Public ISBD [article]  inManagement science > Vol. 57 N° 10 (Octobre 2011) . - pp. 1861-1878 Titre : Intellectual capital and financing decisions : Evidence from the U.S. patent data Type de document : texte imprimé Auteurs : Qiao Liu, Auteur ; Kit Pong Wong, Auteur Année de publication : 2012 Article en page(s) : pp. 1861-1878 Note générale : Management Langues : Anglais (eng) Mots-clés : Capital structure Default Intellectual capital Patent-based metrics R&D-based Index. décimale : 658 Organisation des entreprises. Techniques du commerce Résumé : This paper develops a real options model to understand two distinct roles played by intellectual capital in corporate financing decisions. Whereas limiting a firm's debt capacity because of its low liquidation value, intellectual capital enhances a firm's debt capacity through its positive impact on earnings. Our model shows that the former dominates or is dominated by the latter, depending on whether the rate of dissipation of intellectual capital upon default is larger or smaller than a critical level, respectively. Using patent-based and research-and-development-based variables as proxies for intellectual capital, we find robust evidence that the relation between intellectual capital and leverage is positive. Specifically, a one-standard-deviation increase in the level of a firm's intellectual capital is associated with an increase of 6.6% to 21.1% in its market leverage. We further find this positive relation to be stronger for biotechnology firms. DEWEY : 658 ISSN : 0025-1909 En ligne : http://mansci.journal.informs.org/content/57/10/1861.abstract [article] Intellectual capital and financing decisions : Evidence from the U.S. patent data [texte imprimé] / Qiao Liu, Auteur ; Kit Pong Wong, Auteur . - 2012 . - pp. 1861-1878. Management Langues : Anglais (eng) in Management science > Vol. 57 N° 10 (Octobre 2011) . - pp. 1861-1878 Mots-clés : Capital structure Default Intellectual capital Patent-based metrics R&D-based Index. décimale : 658 Organisation des entreprises. Techniques du commerce Résumé : This paper develops a real options model to understand two distinct roles played by intellectual capital in corporate financing decisions. Whereas limiting a firm's debt capacity because of its low liquidation value, intellectual capital enhances a firm's debt capacity through its positive impact on earnings. Our model shows that the former dominates or is dominated by the latter, depending on whether the rate of dissipation of intellectual capital upon default is larger or smaller than a critical level, respectively. Using patent-based and research-and-development-based variables as proxies for intellectual capital, we find robust evidence that the relation between intellectual capital and leverage is positive. Specifically, a one-standard-deviation increase in the level of a firm's intellectual capital is associated with an increase of 6.6% to 21.1% in its market leverage. We further find this positive relation to be stronger for biotechnology firms. DEWEY : 658 ISSN : 0025-1909 En ligne : http://mansci.journal.informs.org/content/57/10/1861.abstract

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