Abstract
The Chinese capital market created a large amount of goodwill assets after several waves of mergers, acquisitions, and restructuring. The potential risks posed by these goodwill assets to the continued stable development of the business during subsequent impairments cannot be ignored. This study selects a sample of non-financial listed companies in the A-share market in China for 2007–2021. The results indicate that goodwill impairment significantly and negatively affects firm performance. At the same time, goodwill impairment significantly affects management capability and mitigates the impact of goodwill impairment on company performance by exercising management capability. High-capacity management plays a greater inhibiting role in the relationship between goodwill impairment and corporate performance. The findings of this study validate the management's ability to perform in companies with goodwill impairment under the new accounting standards and also provide reference values on how to reduce the risks associated with goodwill impairment.
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