Picking winners: Managerial ability and capital allocation

Arbeitspapier

We examine how division managers' human capital affects internal capital allocation using a hand-collected data set of divisional managers at S&P 1,500 firms. Based on a novel measure of division-manager ability, we show that more able division managers receive substantially larger capital allocations. This effect is robust to controlling for the possibility of assortative matching and more pronounced for firms with better governance. We also find that the allocation of extra capital to higher-ability managers creates firm value. These findings suggest efficient fund transfers to high-productivity managers and provide support for a largely unexplored bright side of internal capital markets.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: KIT Working Paper Series in Economics ; No. 163

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Capital Budgeting; Fixed Investment and Inventory Studies; Capacity ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance ; Human Capital; Skills; Occupational Choice; Labor Productivity
• Thema: Managerial Ability ; Managerial Efficiency ; Human Capital ; Capital Budgeting ; Investment ; Internal Capital Markets

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Benz, Andreas ; Demerjian, Peter R. ; Hoang, Daniel ; Ruckes, Martin E.
• Ereignis: Veröffentlichung
• (wer): Karlsruher Institut für Technologie (KIT), Institut für Volkswirtschaftslehre (ECON)
• (wo): Karlsruhe
• (wann): 2024

Weitere Informationen

• Handle: http://hdl.handle.net/10419/283896
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ