Journal of Accounting and Economics 2026
Managerial delegation within firms and peer information environment
Abstract
This paper examines whether and how the peer information environment – generated by peer firms’ disclosures and by the information intermediaries covering them – affects the CEO’s delegation of decision rights to division managers (DMs). Using an international survey dataset, I measure within-firm delegation of decision-making over capital investment, human capital investment, investment in new products, and sales. I find that CEOs delegate more to managers of divisions in country-industries with richer peer information environments. Cross-sectional tests highlight three underlying channels. Specifically, the results suggest that peer information (i) helps the CEO acquire information to reduce potential information disadvantages relative to DMs (CEO learning), (ii) mitigates CEO-DM agency frictions (agency mitigation), and (iii) provides DMs with relevant information to make better decisions (DM learning). While CEO learning reduces delegation, agency mitigation and DM learning increase it. These findings provide evidence that information about peers influences the internal organization of firms.
- DOI
- 10.1016/j.jacceco.2026.101951
- Pages
- 101951
- Language
- en
- Sources
- crossref openalex