We study the effect that improved management information has upon a firm's leverage and corporate governance choices. Corporate headquarters can create internal control systems that identify managerial opportunities to shirk, and can make governance interventions to prevent shirking. Governance...

We study the effect that internal information systems have upon a firm’s leverage and corporate governance choices. Information systems lower governance costs by facilitating more targeted interventions. But they also generate asymmetric information between firms and their investors. As a...