How Much Are Differences in Managerial Ability Worth

  title={How Much Are Differences in Managerial Ability Worth},
  author={R. Hayes and S. Schaefer},
  journal={Journal of Accounting and Economics},
  • R. Hayes, S. Schaefer
  • Published 1999
  • Economics
  • Journal of Accounting and Economics
  • This paper attempts to measure how much differences in managerial ability can affect firms' values. If transaction costs or firm specific human capital prevent the firm and CEO from recontracting to the CEO's market wage, then the value of the firm will depend on the continued employment of the CEO. Assuming perfect capital markets, abnormal returns surrounding the sudden termination of the manager/firm relationship will reflect these quasi rents. Applying Lazear's (1986) model of raids in the… CONTINUE READING
    163 Citations

    Tables from this paper


    Contracts and the Market for Executives
    • 553
    • PDF
    The Wealth Effects of Company Initiated Management Changes
    • 217
    • Highly Influential
    A Theory of Wage Dynamics
    • 911
    • Highly Influential
    Performance Pay and Top Management Incentives
    • 5,621
    • PDF
    Corporate performance and managerial remuneration: An empirical analysis
    • 1,756
    The Econometrics of Financial Markets
    • 4,464
    • PDF
    Authority, Control, and the Distribution of Earnings
    • 1,208
    • Highly Influential
    Outside directors and CEO turnover
    • 4,014