In the first essay, I examine how managerial opportunism affects corporate investment efficiency and, ultimately, firm performance. Prior research establishes corporate investment efficiency as a function of the firm’s information environment and internal governance. To measure managerial opportunism, I use an ex-ante firm level measure of managerial opportunism based on insider trading patterns and test its effects on investment efficiency and performance. Extant research associates opportunistic insider trading with opaque information environments about the firm and weak firm governance, making it an apropos proxy for opportunistic managerial behavior.
Despite the clear establishment of opportunistic insider trading as an agency problem in the literature, it remains unanswered how the managerial insider trading decision’s economic irrationality might reflect a broader agency problem that affects firm investment policy and performance. I introduce competing hypotheses that managerial opportunism may positively associate with overinvestment through “empire building” and excessive risk taking at shareholders’ expense. On the contrary, manv agerial opportunism may lead to underinvestment through rent seeking behavior. My results show that managerial opportunism decreases firm investment efficiency and negatively affects accounting and stock performance. Further tests show that both the quality of the information environment and internal governance moderate the effects of managerial opportunism, providing a unique perspective on how insider trading policy and regulation can affect corporate investment policy. / Includes bibliography. / Dissertation (PhD)--Florida Atlantic University, 2021. / FAU Electronic Theses and Dissertations Collection
| Identifer | oai:union.ndltd.org:fau.edu/oai:fau.digital.flvc.org:fau_78759 |
| Contributors | Silverstein, Brian (author), Pennathur, Anita K. (Thesis advisor), Javakhadze, David (Thesis advisor), Florida Atlantic University (Degree grantor), Department of Finance, College of Business |
| Publisher | Florida Atlantic University |
| Source Sets | Florida Atlantic University |
| Language | English |
| Detected Language | English |
| Type | Thesis or Dissertation, Text |
| Format | 136 p., application/pdf |
| Rights | Copyright © is held by the author with permission granted to Florida Atlantic University to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder., http://rightsstatements.org/vocab/InC/1.0/ |
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