Search results

1 – 10 of over 73000
Article
Publication date: 13 July 2022

Qiao Xu, Guy Dinesh Fernando and Richard A. Schneible

The purpose of this study is to investigate the impact of the age diversity of the top management team (TMT) on firm performance and on the managerial ability of the TMT…

Abstract

Purpose

The purpose of this study is to investigate the impact of the age diversity of the top management team (TMT) on firm performance and on the managerial ability of the TMT. Furthermore, this study investigates how the relationship between age diversity and firm performance is mediated by managerial ability and the contextual nature of the relationship.

Design/methodology/approach

This is an empirical study which uses regression analyses and mediation analyses to evaluate the hypotheses.

Findings

The authors observe a negative relationship between age diversity and firm performance and also between age diversity and managerial ability of the TMT. Further, the authors find that that the negative relationship between age diversity and firm performance is mediated by managerial ability. The authors also find that the relation between performance and age diversity is context specific – the negative relationship between age diversity and firm performance is ameliorated during times of financial crisis.

Social implications

In an environment where diversity is beginning to be valued, insights into the impact of different types of diversity on performance become important. Age diversity is a critical component of diversity. Therefore, insights into the impact of age diversity on performance will be of interest to managers, academics and even regulators.

Originality/value

To the best of the authors’ knowledge, this study is the first to evaluate the impact of age diversity on the market perception of firm performance of US firms using a large, comprehensive, multi-year data set. Furthermore, this is the only study to evaluate the impact of age diversity on managerial ability and show the mediating effect of managerial ability on the relationship between age diversity and firm performance.

Details

Review of Accounting and Finance, vol. 21 no. 4
Type: Research Article
ISSN: 1475-7702

Keywords

Open Access
Article
Publication date: 16 March 2022

Bill B. Francis, Xian Sun, Chia-Hsiang Weng and Qiang Wu

The aim of this paper is to examine how managerial ability affects corporate tax aggressiveness.

Abstract

Purpose

The aim of this paper is to examine how managerial ability affects corporate tax aggressiveness.

Design/methodology/approach

The study follows the work of Demerjian, Lev, and McVay (2012) and quantifies managerial ability by calculating how efficiently managers generate revenues from given economic resources using the data envelopment analysis (DEA) approach. The study uses a wide range of measures of tax aggressiveness. Firm fixed-effects regressions and a difference-in-differences approach using information regarding CEO turnover to control for endogeneity are used.

Findings

The study finds a negative relationship between managerial ability and corporate tax aggressiveness. Further tests show that this negative relationship is more pronounced for firms with higher investment opportunities or firms with more reputational concerns.

Originality/value

Given the significant costs associated with tax aggressiveness and the negative effect it can have on managerial reputation if discovered, the results suggest that more able managers invest less effort in aggressive tax avoidance activities. This study furthers the understanding of how managerial personal traits affect corporate decision-making.

Details

China Accounting and Finance Review, vol. 24 no. 1
Type: Research Article
ISSN: 1029-807X

Keywords

Book part
Publication date: 28 September 2020

Dipankar Ghosh, Xuerong (Sharon) Huang and Li Sun

Purpose – This study examines how managerial ability relates to employee productivity using a broad and generalized sample of US firms.Methodology – This study employs a…

Abstract

Purpose – This study examines how managerial ability relates to employee productivity using a broad and generalized sample of US firms.

Methodology – This study employs a generalized sample of firm-years from all industries between 1980 and 2013.

Findings – By contending that managers differ in their ability to synchronize management processes and human capital in ways that enhance employee productivity, the authors provide evidence showing that more-able managers are associated with higher employee productivity. In addition, the authors find that high-ability managers moderate the negative relation between uncertain environments (high-technology firms) and employee productivity. Furthermore, the authors decompose employee productivity into employee efficiency components and employee cost components. The authors find a significant positive association between managerial ability and the employee efficiency component, but do not see a significant association between managerial ability and the employee cost component.

Value – The results contribute to the understanding of employee productivity by showing the relation between managerial ability and employee productivity.

Article
Publication date: 23 February 2022

Efstathios Magerakis

This paper examines the role of managerial discretion in the relation between managerial ability on the level of corporate cash.

Abstract

Purpose

This paper examines the role of managerial discretion in the relation between managerial ability on the level of corporate cash.

Design/methodology/approach

Conjoining the upper echelons theory's premises and the theoretical framework of cash holdings, we posit that the managerial ability's effect on cash policy varies with managerial discretion using firm-level data. To test the empirical prediction, we employ a linear regression model with fixed effects with a sample of US listed firms from 1980 to 2016.

Findings

The findings reveal that the positive association between the ability of chief executive officers and corporate cash savings is weakened by firm-level managerial discretion. The results are robust to various additional analyses, namely lagged independent variables regression, reduced form regression and granger causality test. Overall, the findings are generally consistent with the cash holding motives yielding transaction and precautionary demand for money. However, our findings also shed light on whether managerial discretion moderates or exacerbates agency problems related to top executives' cash holding policies.

Originality/value

This work's distinct characteristic is the investigation of the joint effect of managerial talent and discretion on a firm's cash holding, which remains unexplored in the literature.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 21 August 2021

Jiaxin Liu and Dongliang Lei

This paper aims to examine the relation between managerial ability and stock price crash risk, conditional on managerial overconfidence. In addition, conditional on…

Abstract

Purpose

This paper aims to examine the relation between managerial ability and stock price crash risk, conditional on managerial overconfidence. In addition, conditional on managerial overconfidence, the authors investigate the effect of managerial ability on firms’ choice of bad news hoarding channels, which result in a stock price crash.

Design/methodology/approach

Using a sample of 24,289 firm-years from companies listed on Compustat and CRSP from 1994 to 2018, the authors conduct panel regression analysis.

Findings

The authors find that managerial ability is positively associated with stock price crash risk only when managerial overconfidence is high. Furthermore, the authors find that managerial ability seems to exacerbate (attenuate) the bad news withholding by the overconfident managers using the earnings guidance (earnings management) channel. The authors find limited evidence that high-ability managers are likely to withhold bad news through the overinvestment channel and “other channels” when managers are overconfident. Finally, the authors find that the joint effect of managerial overconfidence and managerial ability on firms’ crash risk is more pronounced when there is a material weakness in firms’ internal controls, high investor belief heterogeneity and high information asymmetry. However, this effect appears to dissipate during the recent financial crisis in 2008.

Originality/value

This research reveals that managerial ability is costly to firms by engendering bad news hoardings and stock price crash risk when managers are overconfident. It also sheds light on how managerial overconfidence and managerial ability affect managers’ choice of bad news withholding channels and stock price crash risk. Finally, the paper is of practical value to the board of directors in selecting the prospective executives.

Details

Review of Accounting and Finance, vol. 20 no. 2
Type: Research Article
ISSN: 1475-7702

Keywords

Article
Publication date: 24 February 2021

Alex Johanes Simamora

The purpose of this paper is to examine the effect of founding-family firms on managerial ability.

Abstract

Purpose

The purpose of this paper is to examine the effect of founding-family firms on managerial ability.

Design/methodology/approach

Founding-family firms are determined by founder and/or family involvement as block holder and as in the firm board. Managerial ability is estimated by data envelopment analysis. Research samples consist of 412 manufacturing firm-years listed in the Indonesian Stock Exchange. Analysis data use random-effect regression as the main analysis and Huber-White regression as an alternative analysis.

Findings

This research finds that founding-family firms have a negative effect on managerial ability. Further, the result shows that lower managerial ability occurred when founding-family firms led by founder and professional CEOs, when other family members involved in the ownership and the board have higher family ownership. It indicates that founding-family firms concern more about family interest, such as family reputation, rather than business needs and best management practice.

Research limitations/implications

Limitation of this research does not occur if the founding-family firms are managed by first, second, third, etc., family generation. Future research expected to consider family generation in founding-family firms management.

Practical implications

This research can be used by founding-family firms in Indonesia as consideration of management policy formulation that can improve managerial ability.

Originality/value

This research provides new evidence if founding-family firms promote lower managerial ability in emerging market such Indonesian market where family businesses are the root of private businesses which have a major contribution to economics.

Details

International Journal of Productivity and Performance Management, vol. 71 no. 5
Type: Research Article
ISSN: 1741-0401

Keywords

Article
Publication date: 3 August 2021

Alex Johanes Simamora

This research aims to examine the moderating role of managerial ability on the relationship between risk-taking behavior and firms' performance.

Abstract

Purpose

This research aims to examine the moderating role of managerial ability on the relationship between risk-taking behavior and firms' performance.

Design/methodology/approach

This research uses 383 manufacturing firm-years listed on the Indonesian Stock Exchange as the research sample. The hypothesis test uses fixed-effect regression analysis.

Findings

The result shows that risk-taking behavior has a positive effect on firms' performance for higher managerial ability. Managerial ability provides higher knowledge, skill and information to get benefits and mitigate costs of risk-taking behavior to improve firms' performance. The role of managerial ability to make risk-taking behavior increase firms' performance occurs more for high-ability managers, dual CEO, shareholder-CEO and family CEO.

Originality/value

This research contributes to answering the conflicting arguments and filling the previous findings gap between risk-taking behavior and firm performance by considering managerial ability as a factor to create effective risk mitigation.

Details

International Journal of Productivity and Performance Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1741-0401

Keywords

Article
Publication date: 8 March 2021

Wray Bradley and Li Sun

The purpose of this study is to examine the relation between managerial ability and fair value inputs (measured as fair value intensity) for nonfinancial firms.

Abstract

Purpose

The purpose of this study is to examine the relation between managerial ability and fair value inputs (measured as fair value intensity) for nonfinancial firms.

Design/methodology/approach

This study uses regression analysis to investigate the impact of managerial ability on the level of fair value inputs.

Findings

This study finds significant and positive relations between managerial ability and use of Level 1 and Level 2 fair value inputs. On the other hand, this study finds an insignificant relation between managerial ability and Level 3 inputs.

Originality/value

The findings contribute to two research streams. To the best of the author’s knowledge, this is perhaps the first study that directly examines the link between managerial ability and fair value inputs.

Details

Journal of Financial Reporting and Accounting, vol. 19 no. 4
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 29 July 2021

Adhitya Agri Putra, Nanda Fito Mela and Ferdy Putra

This study aims to examine the effect of managerial ability on real earnings management (hereafter REM) in family firms.

Abstract

Purpose

This study aims to examine the effect of managerial ability on real earnings management (hereafter REM) in family firms.

Design/methodology/approach

The sample consists of 864 firms-years listed in the Indonesian Stock Exchange. REM is measured by abnormal activities. Managerial ability is measured by data envelopment analysis. Data analysis uses random-effect regression analysis.

Findings

Family firms reduce the possibility of higher ability managers to engage in REM. Compare to non-family firms, higher ability managers in family firms are more likely to engage in REM to improve future earnings.

Research limitations/implications

This research only uses efficiency score data envelopment analysis to measure managerial ability while the managerial ability is, by nature, multi-dimensional and unobservable. This research also does not find the role of professional Chief Executive Officer (hereafter CEO) in the family firms in REM behavior because does not consider the professional CEO motivation (e.g. compensation structure).

Practical implications

This research is expected to help family firms formulate managers' selection based on managerial ability. This research also is expected to help investors and creditors to put their funds in the family firms with higher ability managers that reduce earnings information distortion.

Originality/value

To the best of the author’s knowledge, this research is the first research that examines the managerial ability on REM in Indonesian family firms. This research also contributes to fil the findings gap in managerial ability and REM.

Details

Corporate Governance: The International Journal of Business in Society, vol. 21 no. 7
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 3 July 2017

Li Sun

This study aims to examine the impact of managerial ability on the total amount of chemical releases reported to the Toxics Release Inventory (TRI) at the US Environmental…

Abstract

Purpose

This study aims to examine the impact of managerial ability on the total amount of chemical releases reported to the Toxics Release Inventory (TRI) at the US Environmental Protection Agency.

Design/methodology/approach

Regression analysis is used to examine the association between managerial ability and chemical releases.

Findings

A negative relationship was found between managerial ability and TRI’s chemical releases, suggesting that more-able managers better reduce TRI’s chemical releases, relative to less-able managers.

Practical implications

By providing useful insights into what determines TRI’s chemical releases, this study should interest policy makers and practitioners.

Originality/value

This study contributes to and links two research schools: managerial ability in management literature and corporate social responsibility (i.e. pollution prevention) in the broad business literature. To the best of the author’s knowledge, this is the first empirical study that performs a direct test of the association between managerial ability and TRI’s toxic chemical releases.

Details

Sustainability Accounting, Management and Policy Journal, vol. 8 no. 3
Type: Research Article
ISSN: 2040-8021

Keywords

1 – 10 of over 73000