Is Management Quality Value Relevant?
: Using a unique database of management quality ratings over a 17 year period, we find that while good management appears to be associated with lower subsequent market returns, this is entirely consistent with an informationally efficient market. Quality of management is value relevant in that bett...
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| Veröffentlicht in: | Journal of business finance & accounting 2011-11, Vol.38 (9-10), p.1184-1208 |
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| Hauptverfasser: | , , |
| Format: | Artikel |
| Sprache: | eng |
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| container_end_page | 1208 |
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| container_issue | 9-10 |
| container_start_page | 1184 |
| container_title | Journal of business finance & accounting |
| container_volume | 38 |
| creator | Agarwal, Vineet Taffler, Richard Brown, Mike |
| description | : Using a unique database of management quality ratings over a 17 year period, we find that while good management appears to be associated with lower subsequent market returns, this is entirely consistent with an informationally efficient market. Quality of management is value relevant in that better managed firms have lower cost of equity, more stable earnings, higher profitability that persists over time, and higher market valuations using the Ohlson (1995 and 2001) method. Potentially endogenous relationships are unlikely to be driving our results. While well managed firms are ‘good firms’, contrary to the belief of many market participants their stocks perform no better than those of poorly managed firms. |
| doi_str_mv | 10.1111/j.1468-5957.2011.02267.x |
| format | Article |
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Quality of management is value relevant in that better managed firms have lower cost of equity, more stable earnings, higher profitability that persists over time, and higher market valuations using the Ohlson (1995 and 2001) method. Potentially endogenous relationships are unlikely to be driving our results. 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Quality of management is value relevant in that better managed firms have lower cost of equity, more stable earnings, higher profitability that persists over time, and higher market valuations using the Ohlson (1995 and 2001) method. Potentially endogenous relationships are unlikely to be driving our results. While well managed firms are ‘good firms’, contrary to the belief of many market participants their stocks perform no better than those of poorly managed firms.</description><subject>Business management</subject><subject>Business studies</subject><subject>Corporate management</subject><subject>cost of equity</subject><subject>efficient market hypothesis</subject><subject>Efficient markets</subject><subject>Enterprises</subject><subject>expected returns</subject><subject>Management</subject><subject>management reputation</subject><subject>Management research</subject><subject>Management Today</subject><subject>Quality</subject><subject>Quality standards</subject><subject>Rates of return</subject><subject>resource based view</subject><subject>Stocks</subject><subject>Studies</subject><subject>Valuation</subject><issn>0306-686X</issn><issn>1468-5957</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2011</creationdate><recordtype>article</recordtype><sourceid>X2L</sourceid><recordid>eNqNkFtv1DAQhS0EEkvhP0RIiKeE8SW-vIC6FS1FhQIql7fRrOtAQja7xEm7--_rNGgfeMLS2JbmnE9Hh7GMQ8HTedUUXGmbl640hQDOCxBCm2L3gC0Oi4dsARJ0rq3-8Zg9ibEBAMG1WbAX5zH7QB39DOvQDdnnkdp62GffqB1D9iW04Ya64c1T9qiiNoZnf98j9vX07dXJu_zi8uz85Pgi96XSJlelBXMNCiqlTBnIVuAr71W18k4KSFFKca15ENZb4IaIS-MNOF-unPdWySP2cuZu-82fMcQB13X0oW2pC5sxotNSSwlWJuXzf5TNZuy7FA4d584J5yCJ7Czy_SbGPlS47es19XvkgFN72OBUEk4l4dQe3reHu2S9nK192AZ_8K1aalZVRx5vUJK06dqnubdKqtO4iS1pm4Zzq5ALsPhrWCfi65l4W7dh_99J8P3y9Hj6JkA-A-o4hN0BQP1vTFtT4vePZ2jdp6VcGoNX8g6qfJwM</recordid><startdate>201111</startdate><enddate>201111</enddate><creator>Agarwal, Vineet</creator><creator>Taffler, Richard</creator><creator>Brown, Mike</creator><general>Blackwell Publishing Ltd</general><general>Wiley Blackwell</general><scope>BSCLL</scope><scope>DKI</scope><scope>X2L</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>201111</creationdate><title>Is Management Quality Value Relevant?</title><author>Agarwal, Vineet ; Taffler, Richard ; Brown, Mike</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c5467-45807d040f4475ea8f0cfcc4fbc932059552d61e28c8017aa137c709c5b9cc843</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2011</creationdate><topic>Business management</topic><topic>Business studies</topic><topic>Corporate management</topic><topic>cost of equity</topic><topic>efficient market hypothesis</topic><topic>Efficient markets</topic><topic>Enterprises</topic><topic>expected returns</topic><topic>Management</topic><topic>management reputation</topic><topic>Management research</topic><topic>Management Today</topic><topic>Quality</topic><topic>Quality standards</topic><topic>Rates of return</topic><topic>resource based view</topic><topic>Stocks</topic><topic>Studies</topic><topic>Valuation</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Agarwal, Vineet</creatorcontrib><creatorcontrib>Taffler, Richard</creatorcontrib><creatorcontrib>Brown, Mike</creatorcontrib><collection>Istex</collection><collection>RePEc IDEAS</collection><collection>RePEc</collection><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Journal of business finance & accounting</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Agarwal, Vineet</au><au>Taffler, Richard</au><au>Brown, Mike</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Is Management Quality Value Relevant?</atitle><jtitle>Journal of business finance & accounting</jtitle><date>2011-11</date><risdate>2011</risdate><volume>38</volume><issue>9-10</issue><spage>1184</spage><epage>1208</epage><pages>1184-1208</pages><issn>0306-686X</issn><eissn>1468-5957</eissn><abstract>: Using a unique database of management quality ratings over a 17 year period, we find that while good management appears to be associated with lower subsequent market returns, this is entirely consistent with an informationally efficient market. 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| fulltext | fulltext |
| identifier | ISSN: 0306-686X |
| ispartof | Journal of business finance & accounting, 2011-11, Vol.38 (9-10), p.1184-1208 |
| issn | 0306-686X 1468-5957 |
| language | eng |
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| source | RePEc; Wiley Online Library Journals Frontfile Complete; Business Source Complete |
| subjects | Business management Business studies Corporate management cost of equity efficient market hypothesis Efficient markets Enterprises expected returns Management management reputation Management research Management Today Quality Quality standards Rates of return resource based view Stocks Studies Valuation |
| title | Is Management Quality Value Relevant? |
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