A Study on the Impact of Managers’ Academic Background on the Market Efficiency: Evidence Based on Post-Earnings Announce Drift

This study examines the impact of managers' educational backgrounds on market efficiency, focusing on the relationship between managers' academic majors and post-earnings announcement drift (PEAD). An analysis of firms listed on the Korean stock market from 2016 to 2020 reveals that firms led by managers with majors in business administration (BA) exhibit larger PEAD. This finding suggests that managers' academic majors can influence the quality of accounting information and, ultimately, market efficiency. Additionally, the PEAD associated with managers holding BA degrees is significant only in KOSPI-listed firms, where managerial expertise in business is critical, while no such effect is observed in KOSDAQ-listed firms, which emphasize industry-specific expertise. This indicates that managerial expertise, shaped by educational backgrounds, may affect the accounting disclosure process, influencing the transparency and accuracy of financial information. This study contributes to the literature by exploring the role of managerial education in financial reporting and provides insights into the reliability of financial disclosures from a corporate governance perspective.