{"title":"Proving their mettle: Managerial ability and firm performance in trying times","authors":"Barry Hettler , James Cordeiro , Arno Forst","doi":"10.1016/j.jcae.2023.100393","DOIUrl":null,"url":null,"abstract":"<div><p><span><span>This study investigates the impact of trying economic times, i.e., periods of economic decline and uncertainty, on managerial ability. We find that trying economic times positively moderate the association between managerial ability and firm profitability. Consistent with these primary findings, we also find that the positive moderating </span>role of economic decline and uncertainty on the ability-performance relationship is most salient in procyclical </span>industries. Our results are robust across multiple measures of economically trying times and managerial ability. Further analyses indicate that in trying times more capable managers generate stronger performance through both improved asset turnover and profit margins.</p></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"20 1","pages":"Article 100393"},"PeriodicalIF":2.9000,"publicationDate":"2023-12-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Contemporary Accounting & Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1815566923000437","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This study investigates the impact of trying economic times, i.e., periods of economic decline and uncertainty, on managerial ability. We find that trying economic times positively moderate the association between managerial ability and firm profitability. Consistent with these primary findings, we also find that the positive moderating role of economic decline and uncertainty on the ability-performance relationship is most salient in procyclical industries. Our results are robust across multiple measures of economically trying times and managerial ability. Further analyses indicate that in trying times more capable managers generate stronger performance through both improved asset turnover and profit margins.