Impact Of Managerial Ability Research Articles

The Impact of Managerial Ability on the Relationship between Strategic Deviance and Cash Flow from Operating Activities

The Impact of Managerial Ability on the Relationship between Strategic Deviance and Cash Flow from Operating Activities

The Impact of Managerial Ability on Firm Optimal Distinctiveness The Moderating Effect of CEO Tenure

The Impact of Managerial Ability on Firm Optimal Distinctiveness The Moderating Effect of CEO Tenure

Sustainability of the cassava processed agro industry business after covid-19 pandemic

Cassava is a food plant that has many advantages and can be processed into various kinds of processed foods. Salatiga City is one of the areas that has the potential to develop the sustainability of cassava processing businesses. At the start of the Covid-19 pandemic, sales of processed cassava experienced a decline. Business sustainability starts from the increase in income and sales volume after Covid-19. This research aims to find out (1) a portrait of the success of cassava processing businesses after the Covid-19 pandemic; (2) analyse the stage of managerial ability and entrepreneurial behaviour of processed cassava agro-industry entrepreneurs;(3) the impact of managerial ability and entrepreneurial behaviour on the achievement of cassava processing businesses in Salatiga City. Purposive sampling is the sample strategy employed in this study. This research uses analysis of partial least squares (PLS) with the help of the app SmartPLS4.0. The results show (1) Currently, the average cassava agro-industry business has experienced an increase in income and sales volume of 41% since the Covid-19 pandemic period; (2) Forming managerial skills are implementation, organization, and supervision. Entrepreneurial behaviour is risk-taking, and creative and innovative; (3) Managerial ability and entrepreneurial behaviour have a significant influence on business success.

The Impact of Managerial Ability and Business Strategy on Real Earnings Management: Evidence from Egypt

The Impact of Managerial Ability and Business Strategy on Real Earnings Management: Evidence from Egypt

Leadership in a pandemic: Do more able managers keep firms out of trouble?

The Coronavirus crisis has led to unprecedented economic shocks to the corporate world and challenged how corporate management contributes to business resilience amid the pandemic. Employing a novel measure of managerial ability constructed for a large sample of U.S. publicly listed firms, we document that firms led by higher managerial ability exhibit lower stock return volatility, higher operating performance, and lower levels of default risk amid the pandemic. A difference-in-differences analysis suggests that the impact of managerial ability on firm performance is stronger during the pandemic than during the pre-pandemic period. The effect of managerial competency on corporate resiliency is more pronounced among firms that have high exposure to COVID-19. In addition, firms led by high managerial competency management are associated with higher stock liquidity and are less likely to exhibit employment, healthcare, safety, and consumer protection related violations amid the pandemic.

Analyst Recommendations: Evidence on Hedge Fund Activism and Managerial Ability

This study investigates analysts’ attitudes toward the cooperation/conflict between hedge fund activists and target firm management by examining the impact of managerial ability on analyst recommendations around hedge fund activism. We find that analysts are more likely to reiterate recommendations and less likely to downgrade recommendations for target firms with high managerial skills following the arrival of hedge fund activists. This may be because analysts recognize advantages associated with target firm management’s superior ability that enables managers to avoid costly fights with hedge fund activists. We also show that stronger managerial ability is associated with the higher analyst forecast accuracy during hedge fund intervention. Our results are robust to a cross-sectional analysis of recommendation changes after activists’ takeover. Collectively, our evidence supports the positive impact of managerial ability on analysts’ opinions within the context of hedge fund activist campaigns and sheds light on the information gathering and processing ability of financial analysts.

The Impact of Managerial Ability on Stock Liquidity

The Impact of Managerial Ability on Stock Liquidity

Managerial Ability and Bond Rating: A Focus on Controlling Shareholders’ Ownership Structure

ABSTRACT Although managerial ability is important for credit risk assessment, it is unclear whether local credit rating agencies consider it an independent risk factor. We examine how Korean agencies evaluate the impact of managerial ability on bond rating depending on controlling shareholders’ ownership structure. We identify controlling shareholders using family-owned businesses (chaebols). The results show that the positive effect of managerial ability on bond rating is diminished in chaebol firms, especially those with a high control–ownership wedge, compared to non-chaebol firms. These findings suggest that managerial ability carries higher weight in the rating process for firms with better ownership structure.

Managerial ability and trade credit

AbstractWe examine whether and how managerial ability affects trade credit (accounts payable, in particular). The empirical analyses show that firms with higher managerial ability are associated with an increase in trade credit received. We also find that the impact of managerial ability on accounts payable is stronger for firms having poorer credit quality or more binding financial constraints. Our findings are robust to alternative measures of key variables, financial crises, product characteristics, and endogeneity concerns.

Managerial ability, earnings quality and ISIS: evidence from Iraq

PurposeThis study investigates the association between managerial ability and earnings quality in firms listed on the Iraq Stock Exchange and how the emergence of the Islamic State of Iraq and Syria (ISIS) influences the association.Design/methodology/approachThis study uses a sample of firms listed on the Iraq Stock Exchange over the period 2012–2018. Managerial ability is quantified using data envelopment analysis, and earnings quality is measured by earnings restatement, earnings persistence, accruals quality and earnings response coefficient. Panel regression analysis is used to examine the research hypotheses.FindingsThe findings indicate that managerial ability positively affects earnings quality of Iraqi firms and that ISIS weakens the relationship between managerial ability and earnings quality. These findings are robust to the alternative measures of managerial ability, as well as to various approaches used to address endogeneity including propensity-score matching and a difference-in-differences analysis.Originality/valueThis study provides insight into the impact of managerial ability on earnings quality in an under-studied emerging market. Furthermore, this study broadens the existing literature about the financial consequences of a modern terrorist group, ISIS.

Does managerial ability affect disclosure? Evidence from earnings press releases

PurposePrior research shows that managers with lower ability release less accurate management earnings forecasts and have more earnings restatements, lower earnings persistence and lower quality accruals estimations. Yet, whether the impact of managerial ability (MA) on financial reporting can be extended to the narrative section of firms' financial disclosures needs to be theoretically and empirically examined. The authors theorize in this paper that managers with low ability opportunistically inflate the tone to increase outsiders' perceptions of their ability. The authors also examine the relation between MA and the informativeness of tone to predict future firm performance and explain investors' reaction at earnings announcement.Design/methodology/approachThe authors collect 24,000 earnings press releases of 1,149 distinct firms between 2004 and 2013. Content analysis is used to proxy the tone of the disclosures. The authors use the score developed by Demerjian et al. (2012) to measure MA. The authors then employ panel data regressions to examine the impact of MA on disclosure tone.FindingsThe authors find that low-ability managers inflate the disclosure tone to positively influence labor market's perceptions about their ability. This effect is magnified for younger and shorter-tenured managers, for firms with more intense monitoring and during bear markets. The authors also find that the tone of earnings press releases of low-ability managers results in a lower stock price reaction. Supplementary analyses show that the results do not only hold for the tone, but also can be extended to other linguistic features such as the numerical intensity and the readability of earnings press releases. The results are robust to alternative library specifications and other corporate disclosures such as CEO letters to shareholders or 10-K filings.Research limitations/implicationsThe paper shows that managers worry about how firm performance influences the labor market assessment of their ability. In particular, the authors find that managers of low ability are willing to opportunistically manipulate the content of corporate disclosures to improve this perception and build their reputation.Originality/valueThe authors contribute by providing theoretical and empirical evidence on how managers attempt to steer assessments of their ability by manipulating corporate disclosures. Consistent with prior business research suggesting that one's ability is a key feature that affects managers' propensity to engage in ethical practices, such as tax avoidance or manipulation of financial information, this study shows that less able managers tend to inflate the tone of the earnings announcements and that this ability-driven bias is likely to be magnified by career concerns.

Impact of Managerial Ability and Power on CEOs Compensation

The present study aims to test whether the rent extraction or efficient contracting which significantly influences the compensation of CEOs in Indian companies. By drawing the sample from all the listed companies providing data on CEO characteristics from the year 2006 to 2018, the study tests the empirical model using ordinary least squares regression and quantile regression. The results of analysis reveal that CEO compensation is tenure-variant and there is a trivial difference between the impact of CEO power and CEO tenure. It is in line with the bargaining theory of managerial ability view on CEO compensation. It supports efficient contracting in CEO compensation. The results of the analysis also reveal that impact of CEO power is comparatively less for long-tenured CEOs. It implies that managerial ability view is maintained and CEO compensation is influenced by their bargaining power. The results also prove that power premium is more in case of group companies compared to non-group companies.
 Key words: CEO compensation, rent extraction theory, efficient contracting theory, CEO Power, CEO Tenure, Indian companies.

Do analysts follow firms with able managers?

Although previous studies suggest that management quality impacts analyst behavior, there is a dearth in direct empirical evidence that proves this. A sample of listed Chinese firms over the period 2008–2016 proves that a firm with highly skilled managers draws more analysts. We use an instrumental variable approach to mitigate endogeneity issues. Tests show that the positive impact of managerial ability on analyst following is more salient in firms with no political connections and firms located in regions with developed formal institutions. Firms with high‐capability managers help analysts improve their forecast accuracy and lower the dispersion of their opinions.

Managerial Ability and External Financing

This research examines the link between managerial ability and firms’ external financing. Our findings show that firms with more able managers tend to mitigate information risk by reducing their loan financing and increasing equity financing. These findings are more prominent for financially unconstrained and well-governed firms, suggesting that high-ability managers are more apt to use equity financing as a financial source in firms with better financial and governance quality. To address potential endogeneity problems, we document that the impact of managerial ability on external financing remains unchanged after we employ yearly regression, change analysis, quantile regression, and the instrumental variable approach.

Managerial ability and bank failure

ABSTRACT Bank failure is a major concern for the authoritative bodies and market participants because of the possible contagion across the financial sector and the subsequent collapse of the economic system. This paper investigates the impact of managerial ability on bank failure. We find that more ably managed banks experienced lower failure probability. Further analyses provide support to this finding and reveal that more ably managed banks are associated with more adequate capital, better asset quality, greater efficiency in the allocation of resources, higher liquidity and lower risk.

The Impact of Managerial Ability on the Relation between Real Earnings Management and Future Firm’s Performance: Applied Study

This study aims to investigate the managerial ability of executives’ managers’ role on mitigating the negative impact of real earnings management on future firm’s performance. The researcher operationalizes managerial ability by using a measure developed by Demerjian, Lev, and McVay (2012). This measure captures managers’ ability to efficiently convert firm resources into sales revenue relative to their industry peers. In other words, higher-ability managers are more likely to generate more sales revenue for a given set of resources compared to lower-ability managers. The researcher follows Roychowdhury (2006) and Kothari et al. (2016) to calculate abnormal sales, abnormal production costs, and abnormal discretionary expenses. To capture the total effects of three REM methods an aggregate REM that is a proxy for real earnings activities was used. Following Gunny (2010) and Huang & Sun (2017) future performance proxies are ROA and operating cash flows to total assets (CFO) for the next three years each year. Using a panel sample of 605 firm-year observations from 2005 to 2015. The study concluded that there is a positive significant relationship between the managerial ability of managers and earnings management through manipulating of real operational activities.

Does managerial ability matter for the choice of seasoned equity offerings?

We provide evidence that managerial ability is positively and significantly related to the issuance method decision of seasoned equity offerings (SEOs) in the U.S. market. Our result is robust after controlling for various internal and external governance mechanisms, addressing the problem of endogeneity, and adopting a number of alternative specifications. We further find that the impact of managerial ability on the SEO issuance choice is stronger for firms with higher information asymmetry, CEO duality and weaker governance settings. Overall, our study supports the notion that higher managerial ability is perceived as a positive quality certification on firm information environments.

Impact of managerial ability and firm-specific variables on insider’s abnormal returns

The notion that corporate insiders trade on the basis of private information is well documented in extant literature. But, whether the depth and degree of abnormal gains depends upon their ability to predict future outcomes is unclear. In this study, we try to examine whether the ability of managers has any relation to abnormal gains on insider trades. This study also attempts to identify firm-specific variables that impact the abnormal returns on insider trades. In this study event, study methodology has been employed to calculate the abnormal returns on a sample of 1101 insider transactions over 197 companies. Data envelopment analysis has been used to measure the managerial ability. Regression results present that volume of trade, riskiness of security and managerial ability of insiders positively impacts the abnormal return on insider trades.

The impact of managerial ability on crisis-period corporate investment

In this study, we document a strong positive relation between pre-crisis managerial ability and corporate investment during the crisis period, which remains robust in the presence of a large array of control variables capturing corporate governance attributes, executive compensation incentives and CEO characteristics. This relationship was prevalent only among firms with CEOs that had general managerial skills, rather than firm-specific skills. Our results also show that the positive relationship between managerial ability and corporate investment was supported by the capacity of such firms to secure greater financing and be less vulnerable to financial constraints during the crisis. Finally, we find that, on average, the stock market evaluates crisis-period investments positively, yet this effect is evident solely among firms characterized by high pre-crisis managerial ability. Overall, the results are consistent with the view that high managerial ability helps to mitigate underinvestment problems during a crisis which in turn increases firm value.

경영자 능력이 기업의 투자효율성에 미치는 영향

경영자 능력이 기업의 투자효율성에 미치는 영향