A project-level analysis of value creation in firms
This paper analyzes value creation in firms at the project level. We present evidence that managers facing short-termist incentives set a lower threshold for accepting projects. Using novel data on new client and product announcements in both the U.S. and international markets, we find that the mark...
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| Veröffentlicht in: | Financial management 2020-06, Vol.49 (2), p.423-446 |
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| container_end_page | 446 |
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| container_issue | 2 |
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| container_title | Financial management |
| container_volume | 49 |
| creator | Cohn, Jonathan B. Gurun, Umit G. Moussawi, Rabih |
| description | This paper analyzes value creation in firms at the project level. We present evidence that managers facing short-termist incentives set a lower threshold for accepting projects. Using novel data on new client and product announcements in both the U.S. and international markets, we find that the market responds less positively to a new project announcement when the firm's managers have incentives to focus on short-term stock price performance. Furthermore, textual analysis of project announcements shows that firms with shorttermist chief executive officers use vaguer and generically positive language when introducing new projects to the marketplace. |
| doi_str_mv | 10.1111/fima.12249 |
| format | Article |
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| ispartof | Financial management, 2020-06, Vol.49 (2), p.423-446 |
| issn | 0046-3892 1755-053X |
| language | eng |
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| source | Business Source Complete; JSTOR Archive Collection A-Z Listing; Wiley Online Library All Journals |
| subjects | Announcements career concerns CEO compensation CEO short‐termism Companies corporate investment Employee incentives Executive compensation Incentives International markets ORIGINAL ARTICLE Textual analysis Value creation |
| title | A project-level analysis of value creation in firms |
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