The effects of managerial ability on firm performance and the mediating role of capital structure: evidence from Taiwan

Date
2021-12
Authors
Ting, Irene Wei Kiong
Tebourbi, Imen
Lu, Wen-Min
Kweh, Qian Long
Journal Title
Journal ISSN
Volume Title
Publisher
Springer Science and Business Media Deutschland GmbH
Abstract
This study utilizes mediation analysis and bootstrapping to analyze the mediating effect of capital structure on the association between managerial ability and firm performance. The dataset consists of 6384 firm-year observations from the Taiwanese electronics industry during 2005–2018. Our results indicate that (1) low (high) levels of debt are likely observed in firms with CEOs with high (low) ability, (2) managerial ability positively affects firm performance, and (3) capital structure mediates the positive relationship between managerial ability and firm performance. Overall, the findings may have limited generalizability due to the specific sample characteristics and provide convincing support for the importance of capital structure as a mediator in the managerial ability-firm performance nexus. Specifically, this study highlights the need for examining the effect of managerial ability on firm performance through a mediator. © 2021, The Author(s).
Description
This article is not available at CUD collection. The version of scholarly record of this article is published in Financial Innovation (2021), available online at: https://doi.org/10.1186/s40854-021-00320-7
Keywords
Capital structure, Firm performance, Managerial ability, Mediation analysis, StoNED, Taiwan
Citation
Ting, I. W. K., Tebourbi, I., Lu, W. -., & Kweh, Q. L. (2021). The effects of managerial ability on firm performance and the mediating role of capital structure: Evidence from taiwan. Financial Innovation, 7(1), https://doi.org/10.1186/s40854-021-00320-7