Λεπτομέρειες βιβλιογραφικής εγγραφής
| Τίτλος: |
Internal Capital Allocation, Voluntary Disclosure, and Investment Efficiency. |
| Συγγραφείς: |
Hwang, Hyun1 (AUTHOR) hyun.hwang@mccombs.utexas.edu |
| Πηγή: |
Management Science (INFORMS). Dec2025, Vol. 71 Issue 12, p10088-10105. 18p. |
| Θεματικοί όροι: |
*Capital allocation, *Organizational structure, *Financial performance, *Nondisclosure, *Resource allocation, *Business enterprises, *Disclosure in accounting, *Corporations |
| Περίληψη: |
I develop an analytical model to examine the effect of disclosure on organizational structure. In this model, an owner with two investment projects decides whether to organize them as a single multidivisional firm or two stand-alone firms whose manager(s) may issue a truthful but costly disclosure of each project's profitability to raise capital. In a multidivisional firm, capital is initially provided by investors and subsequently allocated across the two projects by the manager. The analysis shows that a multidivisional structure allows for efficient internal capital allocation while avoiding disclosure costs, whereas a stand-alone structure prevents inefficient cross-subsidization. Specifically, a multidivisional structure is optimal when disclosure costs are high relative to project payoffs. These results help explain empirical evidence that multidivisional firms tend to trade at a discount. [ABSTRACT FROM AUTHOR] |
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