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Regulatory oversight and managerial ability

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  • Reza Hesarzadeh

    (Ferdowsi University of Mashhad)

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.

Suggested Citation

  • Reza Hesarzadeh, 2020. "Regulatory oversight and managerial ability," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(4), pages 559-585, December.
    • Handle: RePEc:spr:eurasi:v:10:y:2020:i:4:d:10.1007_s40821-020-00150-0
    DOI: 10.1007/s40821-020-00150-0
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    More about this item

    Keywords

    Regulatory oversight; Managerial ability; Spillover effect; Difference-in-differences design; Emerging capital market;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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