{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2025,12,5]],"date-time":"2025-12-05T09:47:32Z","timestamp":1764928052029,"version":"3.46.0"},"reference-count":43,"publisher":"Institute for Operations Research and the Management Sciences (INFORMS)","issue":"12","content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["Management Science"],"published-print":{"date-parts":[[2025,12]]},"abstract":"<jats:p>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\u2019s 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.<\/jats:p>\n                  <jats:p>This paper was accepted by Ranjani Ananthakrishnan, accounting.<\/jats:p>","DOI":"10.1287\/mnsc.2022.01295","type":"journal-article","created":{"date-parts":[[2025,4,16]],"date-time":"2025-04-16T12:55:11Z","timestamp":1744808111000},"page":"10088-10105","source":"Crossref","is-referenced-by-count":0,"title":["Internal Capital Allocation, Voluntary Disclosure, and Investment Efficiency"],"prefix":"10.1287","volume":"71","author":[{"ORCID":"https:\/\/orcid.org\/0000-0003-4402-7523","authenticated-orcid":false,"given":"Hyun","family":"Hwang","sequence":"first","affiliation":[{"name":"McCombs School of Business, The University of Texas at Austin, Austin, Texas 78712"}]}],"member":"109","reference":[{"key":"B1","unstructured":"Arrow K (2016) Future directions of research in the Coasean tradition. The Ronald Coase Institute (April 20), https:\/\/www.coase.org\/conferences\/2015washingtonconferencearrow.pdf."},{"key":"B2","doi-asserted-by":"publisher","DOI":"10.1016\/S0165-4101(96)00446-6"},{"key":"B3","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1090.1126"},{"key":"B4","doi-asserted-by":"publisher","DOI":"10.2308\/TAR-2023-0155"},{"key":"B5","doi-asserted-by":"publisher","DOI":"10.1093\/oxfordjournals.jleo.a023398"},{"key":"B6","doi-asserted-by":"publisher","DOI":"10.2308\/accr.2003.78.4.909"},{"key":"B7","doi-asserted-by":"publisher","DOI":"10.1016\/0304-405X(94)00798-6"},{"key":"B8","doi-asserted-by":"publisher","DOI":"10.1016\/j.jacceco.2010.10.003"},{"key":"B9","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.2015.2341"},{"key":"B10","doi-asserted-by":"publisher","DOI":"10.1257\/aer.91.3.525"},{"key":"B11","doi-asserted-by":"publisher","DOI":"10.1007\/s11142-013-9223-1"},{"volume-title":"Accounting Theory: An Information Content Perspective","year":"2002","author":"Christensen JA","key":"B12"},{"key":"B13","doi-asserted-by":"publisher","DOI":"10.1016\/0165-4101(90)90038-6"},{"key":"B14","doi-asserted-by":"publisher","DOI":"10.2308\/TAR-2021-0024"},{"issue":"3","key":"B15","first-page":"534","volume":"68","author":"Darrough MN","year":"1993","journal-title":"Accounting Rev."},{"key":"B16","doi-asserted-by":"publisher","DOI":"10.2307\/2490910"},{"issue":"1","key":"B17","first-page":"1","volume":"65","author":"Dye RA","year":"1990","journal-title":"Accounting Rev."},{"key":"B18","doi-asserted-by":"publisher","DOI":"10.1506\/6XYN-E8F1-BW3F-CUCU"},{"key":"B19","doi-asserted-by":"publisher","DOI":"10.2308\/accr.2007.82.5.1171"},{"key":"B20","doi-asserted-by":"crossref","unstructured":"Gertner RH, Scharfstein D (2012) Internal capital markets, chapter 16. Gibbons R, Roberts J, eds.\n                      The Handbook of Organizational Economics\n                      (Princeton University Press, Princeton, NJ), 655\u2013679.","DOI":"10.1515\/9781400845354-018"},{"key":"B21","doi-asserted-by":"publisher","DOI":"10.1561\/1400000020"},{"key":"B22","doi-asserted-by":"publisher","DOI":"10.1093\/rfs\/hhg043"},{"key":"B23","doi-asserted-by":"publisher","DOI":"10.2308\/tar-2018-0749"},{"key":"B24","doi-asserted-by":"publisher","DOI":"10.2307\/2491502"},{"issue":"2","key":"B25","first-page":"323","volume":"76","author":"Jensen MC","year":"1986","journal-title":"Amer. Econom. Rev."},{"key":"B26","doi-asserted-by":"publisher","DOI":"10.2307\/2491118"},{"key":"B27","doi-asserted-by":"publisher","DOI":"10.1111\/1475-679X.12109"},{"key":"B28","doi-asserted-by":"publisher","DOI":"10.2307\/2491466"},{"key":"B29","doi-asserted-by":"publisher","DOI":"10.2307\/2555889"},{"key":"B30","doi-asserted-by":"publisher","DOI":"10.1111\/j.1475-679X.2009.00360.x"},{"key":"B31","doi-asserted-by":"publisher","DOI":"10.2308\/TAR-2019-0493"},{"key":"B32","doi-asserted-by":"publisher","DOI":"10.1016\/j.jacceco.2005.04.002"},{"key":"B33","doi-asserted-by":"publisher","DOI":"10.1111\/0022-1082.00200"},{"key":"B34","doi-asserted-by":"publisher","DOI":"10.1016\/j.jacceco.2019.101246"},{"key":"B35","doi-asserted-by":"publisher","DOI":"10.1111\/0022-1082.00299"},{"key":"B36","doi-asserted-by":"publisher","DOI":"10.1111\/j.1540-6261.1997.tb03810.x"},{"key":"B37","first-page":"109","volume-title":"Handbook of the Economics of Finance","volume":"1","author":"Stein JC","year":"2003"},{"volume-title":"Theory of Accounting and Control","year":"1997","author":"Sunder S","key":"B38"},{"volume-title":"The Theory of Corporate Finance","year":"2006","author":"Tirole J","key":"B39"},{"key":"B40","doi-asserted-by":"publisher","DOI":"10.1016\/0165-4101(83)90011-3"},{"key":"B41","doi-asserted-by":"publisher","DOI":"10.1016\/0165-4101(90)90020-5"},{"key":"B42","doi-asserted-by":"publisher","DOI":"10.1016\/j.jacceco.2022.101535"},{"key":"B43","doi-asserted-by":"publisher","DOI":"10.2308\/accr-50375"}],"container-title":["Management Science"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/pubsonline.informs.org\/doi\/pdf\/10.1287\/mnsc.2022.01295","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2025,12,5]],"date-time":"2025-12-05T09:42:42Z","timestamp":1764927762000},"score":1,"resource":{"primary":{"URL":"https:\/\/pubsonline.informs.org\/doi\/10.1287\/mnsc.2022.01295"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2025,12]]},"references-count":43,"journal-issue":{"issue":"12","published-print":{"date-parts":[[2025,12]]}},"alternative-id":["10.1287\/mnsc.2022.01295"],"URL":"https:\/\/doi.org\/10.1287\/mnsc.2022.01295","relation":{},"ISSN":["0025-1909","1526-5501"],"issn-type":[{"type":"print","value":"0025-1909"},{"type":"electronic","value":"1526-5501"}],"subject":[],"published":{"date-parts":[[2025,12]]}}}