Investment and information asymmetry in corporate sustainability : Incentive-auditing contracts and policy insights

Wang, Zhongli; Nishihara, Michi

doi:https://doi.org/10.1016/j.irfa.2025.104435

Investment and information asymmetry in corporate sustainability : Incentive-auditing contracts and policy insights

Wang, Zhongli; Nishihara, Michi

International Review of Financial Analysis, 2025, 105, 104435

アクセス数:105件（2026-02-15 12:39 集計）

固定URL: https://hdl.handle.net/11094/102774

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タイトル	Investment and information asymmetry in corporate sustainability : Incentive-auditing contracts and policy insights
著者	著者名 Wang, Zhongli
著者	NRID 1000020456940 1000020456940 ORCID 0000-0003-2673-1250 0000-0003-2673-1250 researchmap permalink nishiharamichi nishiharamichi Scopus Author ID 23397674300 23397674300 著者名 Nishihara, Michi
キーワード等	Agency problem
	ESG investing
	Information asymmetry
	Real options
	Sustainability
内容	Wang Z., Nishihara M.. Investment and information asymmetry in corporate sustainability: Incentive-auditing contracts and policy insights. International Review of Financial Analysis 105, 104435 (2025); https://doi.org/10.1016/j.irfa.2025.104435.
抄録	This paper develops a real options model incorporating incentive-auditing contracts to address principal–agent challenges in ESG investments arising from information asymmetry. The model promotes honest reporting by managers through tailored incentives and auditing mechanisms, while also introducing a subsidy policy to evaluate its effects on contracts and social welfare. Our results reveal a paradox in optimal contracts: incentives may inadvertently favor unsustainable projects by mitigating information costs, thereby delaying sustainable investments. Enhanced corporate transparency is associated with reduced incentives, a lower investment threshold for sustainable projects, and an increased option value for owners but a decreased one for managers. Interestingly, moderate transparency reduces social welfare due to rising auditing costs, whereas both very high and very low transparency levels yield improved social welfare outcomes. Subsidy policies further bolster sustainable investment, especially in low-transparency settings, and modify the impact of transparency on owners’ option value.
出版者	Elsevier Inc.
収録物名	International Review of Financial Analysis
巻(号)	105
ページ	104435
刊行年月	2025-09-01
言語	英語
ハンドルURL	https://hdl.handle.net/11094/102774
PISSN	10575219
関連情報 (isIdenticalTo)	DOI (出版社版) https://doi.org/10.1016/j.irfa.2025.104435
アクセス権	open access
権利情報	This article is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
権利情報	© 2025 The Authors
出版タイプ	Version of Record
カテゴリ	学術雑誌論文 Journal Article

資源タイプ	学術雑誌論文
ローカル資源タイプ	学術雑誌論文
DCMI資源タイプ	text
DCTERMS.bibliographicCitation	International Review of Financial Analysis. 2025, 105, p. 104435
DC.title	Investment and information asymmetry in corporate sustainability : Incentive-auditing contracts and policy insights
DC.creator	Wang, Zhongli
DC.creator	Nishihara, Michi
DC.publisher	Elsevier Inc.
DC.language' scheme='DCTERMS.RFC1766	英語
DC.type' scheme='DCTERMS.DCMIType	text
DCTERMS.issued' scheme='DCTERMS.W3CDTF	2025-09-01
DC.identifier	https://doi.org/10.1016/j.irfa.2025.104435
DC.subject	Agency problem
	ESG investing
	Information asymmetry
	Real options
	Sustainability
DC.description	Wang Z., Nishihara M.. Investment and information asymmetry in corporate sustainability: Incentive-auditing contracts and policy insights. International Review of Financial Analysis 105, 104435 (2025); https://doi.org/10.1016/j.irfa.2025.104435.
DCTERMS.abstract	This paper develops a real options model incorporating incentive-auditing contracts to address principal–agent challenges in ESG investments arising from information asymmetry. The model promotes honest reporting by managers through tailored incentives and auditing mechanisms, while also introducing a subsidy policy to evaluate its effects on contracts and social welfare. Our results reveal a paradox in optimal contracts: incentives may inadvertently favor unsustainable projects by mitigating information costs, thereby delaying sustainable investments. Enhanced corporate transparency is associated with reduced incentives, a lower investment threshold for sustainable projects, and an increased option value for owners but a decreased one for managers. Interestingly, moderate transparency reduces social welfare due to rising auditing costs, whereas both very high and very low transparency levels yield improved social welfare outcomes. Subsidy policies further bolster sustainable investment, especially in low-transparency settings, and modify the impact of transparency on owners’ option value.
DC.rights	This article is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
DC.rights	© 2025 The Authors
DC.format	102774
citation_title	Investment and information asymmetry in corporate sustainability : Incentive-auditing contracts and policy insights
citation_author	Wang, Zhongli
citation_author	Nishihara, Michi
citation_publisher	Elsevier Inc.
citation_language	英語
citation_date	2025-09-01
citation_journal_title	International Review of Financial Analysis
citation_volume	105
citation_firstpage	104435
citation_doi	https://doi.org/10.1016/j.irfa.2025.104435
citation_public_url	https://hdl.handle.net/11094/102774

Investment and information asymmetry in corporate sustainability : Incentive-auditing contracts and policy insights

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