The Role of Common Risk in the Effectiveness of Explicit Relative Performance Evaluation

The author thanks the dissertation committee for guidance and support: Senyo Tse (chair), Anwer Ahmed, Thomas Omer, Dechun Wang, and Asghar Zardkoohi. The author is also thankful for helpful suggestions from Ana Albuquerque, Jeremy Douthit, Yonca Ertimur, Alan Jagolinzer, Bree Josefy, Sarah McVay, Stevie Neuman, Paige Patrick, Adrienne Rhodes, Jonathan Rogers, and Ian Tarrant, as well as accounting workshop participants at Texas A&M University, University of Arizona, University of Colorado Boulder, University of Washington, and the 2015 Conference on Convergence of Financial and Managerial Accounting Research. This paper is based on the author’s dissertation at Texas A&M University. The paper was previously titled “The Effect of Relative Performance Evaluation on Investment Efficiency and Firm Performance.” All data are publicly available from databases identified in the paper.