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Managerial ability and stock price synchronicity

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  • Fu, Junhui
  • Chen, Xingwei
  • Liu, Yufang
  • Chen, Rongda

Abstract

This study investigates the impact of managerial ability on stock price synchronicity. Using a large sample of Chinese firms, we find that there is a negative relationship between managerial ability and stock price synchronicity. This finding holds after a series of robustness checks including potential endogeneity issues, different measures of managerial ability and stock price synchronicity, subsample analysis, and the winsorization of several variables. Further analyses show that the negative relationship is more pronounced for private enterprises and higher institutional shareholding firms. Finally, we find that managerial ability affects the stock price synchronicity through the opacity of financial reports.

Suggested Citation

  • Fu, Junhui & Chen, Xingwei & Liu, Yufang & Chen, Rongda, 2022. "Managerial ability and stock price synchronicity," Research in International Business and Finance, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:riibaf:v:60:y:2022:i:c:s0275531921002270
    DOI: 10.1016/j.ribaf.2021.101606
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    More about this item

    Keywords

    Managerial ability; Stock price synchronicity; State ownership; Institutional shareholding; Opacity of financial reports;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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