Financial statement comparability and corporate investment efficiency

What is it about?

In this paper, we examine the relation between financial statement comparability and corporate investment efficiency of a large sample of U.S. firms. We find that financial statement comparability mitigate risks associated with both under-investment and over-investment. We find that product market competition mediates the relation between financial statement comparability and investment efficiency. Our results are relevant for those interested in alternative modes of investment efficiency, financial statement comparability, and firm-fixed effect models.

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