The Effect of Managerial Ability on the Divergence of Opinion of Investors

Abstract

This study examines the association between managerial ability and divergence of opinion among investors. Prior studies suggest that high quality disclosure helps investors to predict future firm performance better and that manager ability is positively associated with earnings quality, resulting in lower level of restatements and in higher levels of earnings and accruals persistence, which, in turn, suggest that able managers positively influence financial reporting quality. Using the measure of managerial ability developed in recent study by Demerjian et al (2012), the results of this study show that managerial ability is negatively associated with divergence of opinion among investors which supports the research hypothesis.|이논문은 경영자 능력이 투자자의견차이에 미치는 영향을 연구한다. 기존 연구들은 고질공시가 투자자들에게 기업성과 예측에 대해 도움이 되고, 경영자 능력과 이익질 간에 양의 관계가 결과적으로 줄인 재무보고의 수정과 증가한 이익지속성 및 발생액 지속성을 증거한다고 한다. 그럼으로 인해 능력이 있는 경영자들은 재무공시 질에 유익한 영향을 미친다고 한다. 경영자 능력의 대용치를 Demerjian et al. (2012) 연구에 따라 사용해서 연구의 결과는 경영자 능력이 투자자 의견차이 와 음의 관계를 가지고 있다.; This study examines the association between managerial ability and divergence of opinion among investors. Prior studies suggest that high quality disclosure helps investors to predict future firm performance better and that manager ability is positively associated with earnings quality, resulting in lower level of restatements and in higher levels of earnings and accruals persistence, which, in turn, suggest that able managers positively influence financial reporting quality. Using the measure of managerial ability developed in recent study by Demerjian et al (2012), the results of this study show that managerial ability is negatively associated with divergence of opinion among investors which supports the research hypothesis.