Rehana Naheed, Bushra Sarwar and Rukhsana Naheed
Many scholars have developed several theories and empirics to study issues related to investment policy. However, there are still some unexplored issues in the field of finance…
Abstract
Purpose
Many scholars have developed several theories and empirics to study issues related to investment policy. However, there are still some unexplored issues in the field of finance that require further analysis and investigation, particularly in the corporate governance literature such as the role of managerial talent in the firms. This study investigated the impact of managerial ability on investment decisions of the firms.
Design/methodology/approach
The study first uses firm efficiency and managerial ability by using data envelope analysis (DEA) proposed by Demerjian, Lev and McVay, 2012. Data is collected for the firms listed in Shenzhen and Shanghai stock exchange for an emerging market of China during the crisis period with 1,640 number of observations.
Findings
The study reveals that the presence of more managerial talent in a firm is significant for the strategic decisions of the firms. Findings follow a resource-based view and identify that more talented managers help the firms in the acquisition of resources specifically during financial distress. The study subdivides the firms based on: ownership structures and financial constraints. Results generated from propensity score matching imply that the role of high-talented managers is significantly different from that of low-talented managers.
Originality/value
The study reveals managerial ability as a determinant of investment policy. To the researchers’ best knowledge, none of the previous studies have been conducted in emerging market literature during the crisis period.
Details
Keywords
Rehana Naheed, Aws AlHares, Yasir Shahab and Rukhsana Naheed
This study aims to investigate the impact of the board’s financial expertise (BFE) on corporate social responsibility (CSR) disclosure in China.
Abstract
Purpose
This study aims to investigate the impact of the board’s financial expertise (BFE) on corporate social responsibility (CSR) disclosure in China.
Design/methodology/approach
Using a sample of Chinese listed firms from 2009-2016 (making 3272 firm-year observations), this study uses the generalized method of moments (GMM) and panel data estimation techniques.
Findings
Using the resource dependence theory, the findings of this study are twofold. First, the is positively associated with the disclosure level of CSR. Second, this positive impact is more pronounced in firms with female CEO and state ownership. The findings are robust to the potential issues of endogeneity and sensitivity analyses.
Practical implications
Practically, the findings hold value for the senior management of Chinese firms to ensure the presence of financial experts in boards to yield both financial and non-financial outcomes.
Social implications
This study points out how financial experts on boards influence the societal outcomes via disclosure of CSR. Financial experts encourage participation in social and sustainable practices which creates a positive image of the firm not only in the eyes of society but also for investors.
Originality/value
This study is unique and contributes to the extant literature by examining the impact of a new attribute, i.e. the BFE on the level of CSR disclosure in China.