Managerial accountability under yardstick competition
Michele Giuranno (),
Marcella Scrimitore () and
Giorgos Stamatopoulos ()
MPRA Paper from University Library of Munich, Germany
Two well-known mechanisms for enhancing managers' accountability are yardstick competition and internal monitoring. Yardstick competition puts managers in direct competition when firms make decisions for re-appointment (Tirole, 2006). Monitoring is used by firms to detect managers' rent-seeking activities. While common wisdom suggests that the joint use of the two means would reinforce each other in promoting managers’ good practices, we find that their interplay distorts managers' behavior who may end up acting in a less accountable way. Furthermore, differences in monitoring across firms bias that distortion, yielding even more counterintuitive results.
Keywords: Tullock context success function; rent seeking; managerial discretion (search for similar items in EconPapers)
JEL-codes: M21 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/92867/1/MPRA_paper_92867.pdf original version (application/pdf)
Journal Article: Managerial Accountability Under Yardstick Competition (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:92867
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().