TY  - JOUR
AU  - Myers,Stewart C.
TI  - Signaling and Accounting Information
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3193
PY  - 1989
Y2  - December 1989
UR  - http://www.nber.org/papers/w3193
L1  - http://www.nber.org/papers/w3193.pdf
N1  - Author contact info:
Stewart C. Myers
Massachusetts Institute of Technology
Sloan School of Management
E62-620
77 Massachusetts Avenue
Cambridge, MA 02142
Tel: 617/253-6696
Fax: 617/258-6855
E-Mail: scmyers@mit.edu
AB  - This paper develops a signaling model in which accounting information improves real investment decisions. Pure cash flow reporting is shown to lead to underinvestment when managers have superior information but are acting in shareholders' interests. Accounting by prespecified, "objective" rules alleviates the underinvestment problem.
ER  -