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Sep 28

Essays on Corporate Investment & Managerial Attribution

Location:

Gerri C. LeBow Hall
TBD
3220 Market Street
Philadelphia, PA 19104

Ph.D. Candidate Wahib Muhammad Ghazni of the Finance Department will be defending his dissertation proposal titled, “Essays on Corporate Investment & Managerial Attribution” on 09/28/2022.

The time and location of his proposal defense is 2:00 pm - 4:00 pm, Location TBA.

Many thanks to Wahib’s dissertation committee: • Committee Chair: David Becher — Dean’s Industry Fellow/Professor of Finance — Drexel University • Committee Member: Edward Nelling — Department Head/Professor of Finance — Drexel University • Committee Member: Naveen Daniel — Associate Professor of Finance — Drexel University • Committee Member: — Jie Cai — Associate Professor of Finance — Drexel University • Committee Member: Melissa Frye — Associate Professor of Finance — University of Central Florida

Abstract: The dissertation empirically investigates the role of managerial traits, skill, and biases on corporate investment decisions. The job market essay causally explores the impact of Diversity Inclusion and Equity (DEI) in the ranks of executive leadership on corporate intangible capital. Using a machine learning algorithm that is trained on the U.S Census to build a novel database that identifies the ethnicity of all C-Suite Executives. It explores the differentiating dimensions of leadership traits that are brought to the managerial decision-making process by DEI. The findings reveal that minority executives pioneer in building a firm’s intangible capital by increasing its innovation output and growing its organizational capital. The other essay shows that the sharp decline in option compensation following SFAS 123R in 2005 has diminished the effectiveness of previous option-based managerial overconfidence measures. Thus, it proposes a new measure of managerial overconfidence: dollars at risk from voluntarily holding vested shares and options. It tests 16 predictions from the literature regarding overconfidence and finds strong evidence validating the proposed measure. The last essay lends empirical support to the premise that boards consider dynamic CEO performance to make their estimates about true CEO skill. It expands the focus of the relative performance evaluation from studying the relationship of CEO pay and turnover with contemporaneous skill performance to including persistent skill. Its findings show that boards do consider dynamic skill performance in their assessment of managerial skill and that persistent skill is associated with higher pay and a lower probability of turnover.

PhD Candidate
Headshot of Wahib Muhammad

PhD Candidate