Data Envelopment Analysis Journal > Vol 5 > Issue 1

Measuring Managerial Ability: A Retrospective and Review of the Literature

Peter Demerjian, University of Illinois at Chicago, USA, , Baruch Lev, New York University, USA,
Suggested Citation
Peter Demerjian and Baruch Lev (2021), "Measuring Managerial Ability: A Retrospective and Review of the Literature", Data Envelopment Analysis Journal: Vol. 5: No. 1, pp 1-25.

Publication Date: 22 Jun 2021
© 2021 P. Demerjian and B. Lev
Managerial abilityhuman capitalfirm efficiency


Download article
In this article:
1 Introduction 
2 Development of the MA Score Using DEA 
3 Review of Managerial Ability Papers 
4 Conclusion and Future Work 


In this paper, we discuss the managerial ability score (MA Score) developed in Demerjian et al. (2012). In the first section, we provide an overview of the development of the score, including the conceptual definition of managerial ability; the implementation of the score using DEA and regression analysis; and some limitations of the score. In the next section, we review research that has used the MA Score as a primary variable. The review, organized by topic, includes papers on firm performance, financial reporting, tax reporting, firm information environment, investment, debt contracting, and executive hiring and compensation contracting. In the final section we recommend directions for future work. This includes extending the original model presented in Demerjian et al., and ways that the growing literature on managerial ability can link to other streams of research.