Monitoring or moral hazard? Evidence from real activities manipulation by venture-backed companies.
Description:
Prior literature suggests two competing theories regarding the role of venture capitalists (VCs) in their portfolio companies. The VC monitoring hypothesis argues that VCs effectively resolve the managerial agency problem through close monitoring and restraining managers' earnings management behavior. The VC moral hazard hypothesis argues that VCs aggravate the private benefits agency problem by exerting influence over managers to artificially inflate exit stock price through earnings managemen…
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Date:
December 2009
Creator:
Liu, Xiang
Partner:
UNT Libraries