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Managerial ability in Business Management: insights from information disclosure decisions

Managerial ability in Business Management: insights from information disclosure decisions

Shi, Jingwen (2024) Managerial ability in Business Management: insights from information disclosure decisions. In: The 8th International Conference of Marketing, Strategy & Policy Research, 22nd Mar, 2024, New Delhi. (Unpublished)

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The influence of managerial ability on corporate decision-making has long been a subject of interest. Current research largely suggests that managers with greater talent are more likely to effectively recognize technology and industry trends, predict market demands accurately, invest in more profitable projects, and manage employees more effectively than their less capable counterparts (e.g., Andreou et al., 2016; Baik et al., 2011; Bochkay et al., 2019; Cao et al., 2019; Curi and Lozano-Vivas, 2020; Francis et al., 2013). In the disclosure literature, Trueman (1986) theorized that skilled managers are motivated to issue voluntary earnings forecasts as a means to demonstrate their abilities and to enhance the market value of their companies. Healy and Palepu (2001) observed an absence of empirical studies that conclusively support or contradict the hypothesis of management talent signaling. Subsequent research exploring the relationship between managerial ability and corporate voluntary disclosure decisions has yielded varied results. For instance, Baik et al. (2011) reported a positive correlation between the likelihood and frequency of management earnings forecasts and CEO competence. However, Bochkay et al. (2019) found that CEO tenure negatively correlates with corporate forward-looking disclosure and its tone. They argue that as uncertainty over managerial ability decreases among investors, the need for further information and managerial career concerns diminish, leading to a reduction in forward-looking disclosures. Previous studies on the impact of managerial ability on voluntary disclosures have primarily concentrated on financial disclosures, such as management forecasts. Yet, there has been a lack of research exploring the role of managerial ability in strategic information disclosure decisions. This study addresses this gap by investigating how managerial ability influences strategic information disclosure. Additionally, this study conducts further analyses on strategic information disclosure. It examines the relationship between managerial ability and changes in the tone of strategic information disclosure, as well as investigates the effects of managerial ability on different categories of strategic information disclosure. This research provides vital insight into the strategic decision making process in information disclosure, highlighting the intricate relationship between managerial talent and corporate transparency. By bridging a significant gap in existing literature, it offers crucial implications for both practitioners and policymakers in the strategic management of corporate information. Furthermore, it sets the stage for additional studies, promoting a more thorough exploration of how managerial ability influences various aspects of corporate strategy and operations.

Item Type: Conference or Conference Paper (Paper)
Uncontrolled Keywords: managerial ability; business management; information disclosure decisions
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Faculty / School / Research Centre / Research Group: Faculty of Business
Related URLs:
Last Modified: 13 May 2024 10:43

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