Managerial ability and investment decisions: Evidence from Chinese market

Naheed, Rehana; Jawad, Muhammad; Naz, Munazza; Sarwar, Bushra; Naheed, Rukhsana

doi:10.1002/mde.3287

Cited by 13 publications

(13 citation statements)

References 65 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…It could be because group firms create and share the internal capital market (Gupta et al, 2021), and group firms can easily raise funds from the financial markets because of firms' reputational effect and political connection in the market (Lensink et al, 2003). In addition to this, Naheed et al (2021) also document that the managerial role in a firm's investment decision is more robust for large and financially unconstrained firms. Here, the impact of the effect of CEO's age on ICFS should be less (more) for a group‐affiliated (standalone) firm; therefore, this study proposed the following hypothesis: Hypothesis 3 : The effects of the CEO's age on ICFS are more (less) for standalone (business group‐affiliated) firms. …”

Section: Theoretical Framework Empirical Literature and Hypotheses Fo...mentioning

confidence: 95%

CEO's age and investment‐cash flow sensitivity

Gupta

2022

Manage Decis Econ

View full text Add to dashboard Cite

This study examines the impact of Chief Executive Officer's (CEO's) age on investment‐cash flow sensitivity (ICFS) for Indian firms from 2005 to 2018. Using system generalized method of moments (GMM), this study finds that young (older) CEOs increase (reduce) ICFS. This study finds that the effects of CEO's age on ICFS become more (less) stronger for standalone (group‐affiliated) firms and during crisis (noncrisis) periods. Further, the individual effect of older (young) CEOs is negatively (positively) associated with the corporate investment, and this effect is not significant for standalone firms and during the crisis period. Overall, this study adds new insights to the existing finance literature.

show abstract

Section: Theoretical Framework Empirical Literature and Hypotheses Fo...mentioning

confidence: 95%

CEO's age and investment‐cash flow sensitivity

Gupta

2022

Manage Decis Econ

View full text Add to dashboard Cite

show abstract

“…Prior studies suggest that small firms generally face more liquidity constraints than large firms, as these firms have less access to commercial paper and public debt [137][138][139][140][141]. Accordingly, small firms depend on banks and other financial institutions to arrange a significant part of their required funds [138], whereas larger companies are less financially constrained and have fewer issues with money when investing in a project [142]. In addition, small firms face more idiosyncratic risks than large firms [137].…”

Section: Plos Onementioning

confidence: 99%

Do powerful CEOs matter for earnings quality? Evidence from Bangladesh

2023

View full text Add to dashboard Cite

This study investigates the effects of powerful Chief Executive Officers (CEOs) on earnings quality in a setting where CEOs have strong dominance over other top executives and occasionally attempt to exert their influence over corporate regulatory bodies. Using 10-year longitudinal data for the period from 2010 to 2019 and 1,395 firm-year observations from listed non-financial firms in Bangladesh, we found that CEOs’ political power and CEOs with high structural and expert power have a significant detrimental effect on earnings quality. Ownership and prestige power have an insignificant impact on earnings quality. These powerful CEOs use accrual and real activity manipulation techniques together to manage the earnings. This study uses the system-generalized method of moment estimates for estimation purposes, and the results remain robust when alternative earnings quality proxies are used. Taken together, our results suggest that CEOs’ political duality (i.e., serving simultaneously as a member of parliament and a CEO) should be restricted and that a CEO’s tenure should be limited to a reasonable period. This research adds to the existing body of knowledge by offering empirical support for CEO power dynamics on earnings quality, specifically political and prestige power.

show abstract

“…In addition, an emerging body of literature has addressed the incremental effects of managerial characteristics, including ability, skill and status, on business decisions. (Demerjian et al , 2013; Naheed et al , 2021; Wang et al , 2020). For instance, Friend and Lang’s (1988) pioneering study examines the level to which executives influence firms’ financial policies.…”

Section: Related Literature and Hypothesis Developmentmentioning

confidence: 99%

Chief executive officer ability and cash holding decision

Magerakis

2022

RAF

View full text Add to dashboard Cite

Purpose This paper aims to consider the effect of the chief executive officer’s (CEO) ability on the amount of cash stock at the firm level. Design/methodology/approach The empirical hypothesis is examined via fixed-effect regression models using data from US incorporated firms. Findings Consistent with the upper echelon theory and cash holding motives, the results reveal that able CEOs are associated with an increased level of cash stock, ceteris paribus. Further analysis shows that the association between CEO ability and firm cash holding is more profound for financially sound firms. The authors also demonstrate that firm size significantly affects the relationship between CEO ability and cash management. The results are robust to various sensitivity analyses and additional tests. Research limitations/implications This work is subject to limitations inherent in the use of relevant proxies. Thus, the study implements several model specifications to ensure the validity of findings in a more generic context. Future research should investigate the board structure’s role and the monitoring procedures on the CEOs’ cash holding behavior as a natural extension to this study. Practical implications The insights derived from the study are expected to advance the decision-making process of cash policies and CEO selection for shareholders, business executives and investment strategists. Originality/value Overall, the study provides new evidence that CEO ability is a contingent factor of corporate cash stock.

show abstract

Managerial ability and investment decisions: Evidence from Chinese market

Cited by 13 publications

References 65 publications

CEO's age and investment‐cash flow sensitivity

CEO's age and investment‐cash flow sensitivity

Do powerful CEOs matter for earnings quality? Evidence from Bangladesh

Chief executive officer ability and cash holding decision

Contact Info

Product

Resources

About