What do we know about managerial ability? A systematic literature review

Anggraini, Puspita; Sholihin, Mahfud

doi:10.1007/s11301-021-00229-6

Cited by 19 publications

(13 citation statements)

References 110 publications

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“…Using the context of developing countries, this study investigates the role of managerial ability in determining two corporate tax outcomes at the same time (tax risk and tax avoidance). Most previous studies have only looked at the effect of managerial ability on tax avoidance (Anggraini and Sholihin, 2021, for a literature review) without taking into account the tax risk construct (Saragih and Ali, 2021, for a literature review). Our work incorporates tax risk and long-run tax avoidance concurrently, to get a wider picture of the phenomenon.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…However, there is limited empirical evidence that links the role of managerial ability with corporate tax behaviours in terms of tax risk and tax avoidance simultaneously (Anggraini and Sholihin, 2021; Saragih and Ali, 2021). Several empirical studies specifically investigate such a relationship, for example, Koester et al (2016), Park et al (2016), Huang et al (2017), Akbari et al (2018) and Khurana et al (2018).…”

Section: Introductionmentioning

confidence: 99%

“…Nevertheless, based on those prior studies, there is no or little role for managerial ability to gain a meaningful impact on the corporate tax risk and long-run tax avoidance concurrently (Anggraini and Sholihin, 2021; Saragih and Ali, 2021). Thus, we are motivated to perform this study.…”

Section: Introductionmentioning

confidence: 99%

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The impact of managerial ability on corporate tax risk and long-run tax avoidance: empirical evidence from a developing country

Saragih

Ali

2023

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Purpose The purpose of this study is to examine the impact of managerial ability on corporate tax risk and long-term tax avoidance using the upper echelons theory. Design/methodology/approach This study uses a quantitative method with regression models, using a sample of listed firms on the Indonesia Stock Exchange from 2011 to 2018. Findings The regression results report that managerial ability negatively influences tax risk and positively impacts long-run tax avoidance. Companies with more able managers have a relatively lower tax risk and greater long-run tax avoidance. The results reveal that firms with managers that possess greater abilities are more committed to long-run tax avoidance while concurrently maintaining a lower level of their tax risk. The impacts the authors report are statistically significant and robust, as proved by a series of robustness checks and additional tests. Research limitations/implications This study only includes firms from one developing country. Practical implications The empirical results might be of interest to board members while envisaging the benefits and costs of appointing and hiring managers, as well as to the tax authority and the other stakeholders interested in apprehending how managerial ability influences corporate tax risk and long-run tax avoidance practices simultaneously. Originality/value This study proposes and tests an explanation for the impact of managerial ability on corporate tax risk and long-run avoidance simultaneously in the context of an emerging country.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The impact of managerial ability on corporate tax risk and long-run tax avoidance: empirical evidence from a developing country

Saragih

Ali

2023

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“…Demerjian, Lev, and McVay (2012) suggested that managerial ability contributed significantly to the firms' outcomes, such as performance, strategy, and reporting process. Besides, Anggraini and Sholihin (2021) conducted a systematic literature review on managerial ability studies, including 120 papers. It was concluded that managerial ability had been related to some topics, such as performance, capital market, reporting quality, and others.…”

Section: Atika Utami and Simamoramentioning

confidence: 99%

“…The previous study on the segment disclosure determinants has focused chiefly on the firm-level characteristics factors (Amado et al, 2018;Cereola & Dynowska, 2022;Kobbi-Fakhfakh et al, 2020;Leung & Verriest, 2015;Lucchese & Di Carlo, 2016;Obradovic et al, 2021;Suttipun & Pratoomsri, 2019;Tran et al, 2021). However, evidence on whether top managers' characteristics are associated with disclosure is still limited (Anggraini & Sholihin, 2021;Plöckinger et al, 2016), especially on segment information. Thus, this study extends the current literature by examining whether top managers' characteristics, specifically managerial ability, are correlated with the extent of segment disclosure in an emerging market (Indonesia).…”

Section: Introductionmentioning

confidence: 99%

Does Managerial Ability Affect Segment Disclosure? Evidence From Indonesia

Atika¹,

Utami²,

Simamora³

2022

JAI

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Research aims: While prior study around segment disclosure has mainly focused on firm characteristics, there is little study on whether managerial characteristics are associated with segment disclosure. This study, therefore, aims to examine the effect of managerial ability on the level of segment disclosure.Design/Methodology/Approach: This study used panel data regression with 556 firm-year observations of Indonesian manufacturing firms during 2017-2020. This study employed the checklist based on PSAK 5 (2015 edition) and adopted a content analysis approach. To measure managerial ability, this study utilized the managerial ability score developed by Demerjian, Lev, McVay (2012) for Indonesian firms. Research findings: The results of this study revealed that managerial ability significantly and positively affected the level of segment disclosure. Higher-ability managers also tended to disclose their segment information more extensively.Theoretical contribution/Originality: This study contributes to the managerial ability literature and the disclosure literature (specifically for segment disclosure). This study is also the first to provide empirical evidence about the effect of managerial ability on the level of segment disclosure.Practitioner/Policy implication: This study results can be used by the Financial Accounting Standards Board of the Institute of Indonesia Chartered Accountants regarding the effectiveness of management approach implementation in Indonesia. Furthermore, the result of this study suggests that managers need to improve their capabilities to accommodate a dynamic business environment.Research limitation/Implication: This study used content analysis to measure segment disclosure, including subjectivity. Nevertheless, this study only investigated manufacturing firms. Further research may expand the industry sample to get a better understanding.

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Corporate business strategy, CEO's managerial ability, and environmental disclosure: The perspective of stakeholder theory

Cahyono,

Harymawan,

Djajadikerta

et al. 2024

Bus Strat Env

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The adoption of business strategies at the corporate level is often associated with the resource‐based view theory. However, many scholars have not definitively determined whether aligning business strategies with the principles of the resource‐based view theory is consistent with the perspective presented by stakeholder theory. This study examines the relationship between corporate business strategies and environmental disclosure. Specifically, we investigate whether CEO's managerial ability may strengthen the association by emphasizing stakeholder theory to address this inquiry. Using a sample of 1243 publicly traded companies registered with the Carbon Disclosure Project (CDP) from 2015 to 2021, our findings indicate that a firm's chosen business strategy significantly influences its environmental disclosure practices. In particular, we observe that firms pursuing an innovation‐oriented business strategy (prospectors) are less inclined to disclose, initiate, or increase their environmental disclosures compared with those following a cost‐efficient business strategy (defenders). To address endogeneity and ensure robustness, we conduct a battery of tests, including the entropy balancing approach, two‐step generalized method of the moment using Arellano‐Bond estimation, Heckman two‐stage regression, and coarsened exact matching. This study offers valuable insights into the determinants of firms' environmental disclosure practices, with significant implications for policymakers, investors, and other stakeholders interested in promoting sustainability and corporate responsibility.

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What do we know about managerial ability? A systematic literature review

Cited by 19 publications

References 110 publications

The impact of managerial ability on corporate tax risk and long-run tax avoidance: empirical evidence from a developing country

The impact of managerial ability on corporate tax risk and long-run tax avoidance: empirical evidence from a developing country

Does Managerial Ability Affect Segment Disclosure? Evidence From Indonesia

Corporate business strategy, CEO's managerial ability, and environmental disclosure: The perspective of stakeholder theory

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