Regulatory oversight and managerial ability

Reza Hesarzadeh ()
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Reza Hesarzadeh: Ferdowsi University of Mashhad

Eurasian Business Review, 2020, vol. 10, issue 4, No 3, 559-585

Abstract: Abstract This paper examines whether regulatory oversight affects managerial ability. To measure regulatory oversight, I use comment letters from two Iranian regulatory agencies. Furthermore, to measure managerial ability, I employ managerial ability-score introduced by Demerjian et al. (Management Science 58(7):1229–1248, 2012). Using a difference-in-differences design with a propensity score matching approach, I reveal that the managerial ability of a firm is enhanced following the receipt of a comment letter by the firm. I further reveal that the managerial ability of a firm is enhanced following the receipt of a comment letter by the firm’s industry peers. Collectively, the findings highlight the internalities and externalities of regulatory oversight in the context of managerial ability.

Keywords: Regulatory oversight; Managerial ability; Spillover effect; Difference-in-differences design; Emerging capital market (search for similar items in EconPapers)
JEL-codes: G32 M42 M48 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s40821-020-00150-0

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