An investment center vs. a profit center: Capital investment under informational asymmetry

The choice problem between a profit and an investment center revolves around whether it is desirable to delegate investment decision responsibility to a divisional manager who is better informed about the investment opportunities of the division. We show that an accounting performance measure has a limited informational role for delegation in the sense that a cost involved in controlling the manager's incentives in relation to his private information for delegation is so high under certain conditions that an investment center cannot be supported as the optimal investment plan.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Accountancy

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2011

Author dc:creator

• Chung, Moon-Chong

Contributors dc:contributor

• Kwon, Young K.

• Business Administration, Accounting
• Economics, Commerce-Business
• Economics, Theory

Statement dc:rights

• Copyright 1992 Chung, Moon-Chong

Language dc:language

eng

Identifier

AAI9305493
(UMI)AAI9305493

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/19912