Quantifying Managerial Ability: A New Measure and Validity Tests

By Peter R. Demerjian, Baruch Lev, Sarah E. McVay. Management Sciences, 2012

1,660 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/f804fc3855a0e6c0bf7cb43b253a6226feb11588

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In Accounting

1. Mostafa Monzur Hasan
2. David B. Farber
3. Li Sun
4. James Stekelberg
5. Xuerong Huang
6. Terry Shevlin
7. Kari Joseph Olsen
8. Mohammad Alhadab

In Strategy and Management

1. Mostafa Monzur Hasan
2. David B. Farber
3. Li Sun
4. Xuerong Huang
5. Mohammad Alhadab
6. Terry Shevlin
7. Wen Wen
8. Panayiotis Ch. Andreou

Citations in the corpus

• The impact of narrative disclosure readability on bond ratings and the cost of debt (2017, neutral): “…communicate clearly.3 Alternatively, 3 In untabulated tests, we show that our results are robust to the inclusion of managerial ability proxies (see Demerjian, Lev, and McVay 2012; Demerjian, Lev, Lewis, and McVay 2012; Bonsall, Holzman and Miller, 2016). self-interested managers may be willing…”
• CEO Duality, Agency Costs, and Internal Capital Allocation Efficiency (2019, neutral): “Managerial Ability : An index developed by Demerjian et al. (2012).”
• How do Auditors Respond to CEO Narcissism? Evidence from External Audit Fees (2015, methodology): “and profitability for the firm (Demerjian et al. 2012). Olsen et al. (2014) show that CEO narcissism is associated with higher earnings-per-share.”
• Readability of Narrative Disclosures in 10-K Reports: Does Managerial Ability Matter? (2018, positive): “This Panel reports the results from the OLS regression of the alternative measures of the readability of narrative disclosures in 10-K reports on managerial ability score of Demerjian et al. (2012) and controls for firm characteristics as in Li (2008) and Lo et al.”
• CEO age and stock price crash risk (2017, methodology): “In particular, we use three-year and seven-year historical industry-adjusted returns on assets and the managerial ability measure of Demerjian et al. (2012).”
• Changes in Operational Efficiency and Firm Performance: A Frontier Analysis Approach (2013, neutral): “Compared to other studies using a large sample, these average efficiency scores are slightly higher than the mean of DEA efficiency (0.57) in Demerjian et al. 2012, and similar to the mean value (0.75) in Leverty and Qian 2010.”
• Institutional investors' horizons and corporate employment decisions (2020, positive): “The results of Model 2 in Table 11 show that, consistent with Demerjian, Lev, and McVay (2012), firms experience less inefficiency in their labor investments when they have more able managers.”
• CEO overconfidence and the value of corporate cash holdings (2019, neutral): “(2006), Dittmar and Mahrt-Smith (2007), Kalcheva and Lins (2007), Denis and Sibilkov (2010), Frésard and Salva (2010), Liu and Mauer (2011), Harford et al.”
• Managerial ability and real earnings management (2017, methodology): “We operationalize managerial ability by using a measure developed by Demerjian, Lev, and McVay (2012).”
• Managerial foreign experience and corporate innovation (2018, positive): “experience in innovative firms vs. non-innovative firms Following Chen et al. (2016), we adopt the event study to address the potential endogeneity.”
• Corporate governance and earnings management in concentrated markets (2020, methodology): “We also make use of the dataset made available by Demerjian, Lev, and McVay (2012) for managerial ability control variable during the same time period.”