used by portfolio managers in portfolio construction: the marginal VaR and the marginal AVaR. We illustrate the proposed …

We examine how division managers' human capital affects internal capital allocation using a hand-collected data set of … divisional managers at S&P 1,500 firms. Based on a novel measure of division-manager ability, we show that more able division … managers receive substantially larger capital allocations. This effect is robust to controlling for the possibility of …