Work

Does managerial ability affect corporate financial constraints? Evidence from China

Year: 2021

Type: article

Abstract: This paper examines the impact of managerial ability on corporate financial constraints. Based on a large sample of Chinese listed companies during the 2007-2019 period, we find that managerial ability is negatively associated with corporate financial constraints. We also find that managerial ability helps alleviate financial constraints probably through lowering information asymmetry, reducing agency conflicts and enhancing corporate profitability. In addition, we find that private firms suffer from more severe financial constraints than state- and foreign-owned firms, and the effect of managerial ability in alleviating financial constraints is more pronounced for private firms. Overall, our findings help understand the role of managerial ability in alleviating financial constraints.

Source: Economic Research-Ekonomska Istraživanja

DOI: 10.1080/1331677x.2021.2004186

Authors: Qiubin Huang, Mengyuan Xiong, Ming Xiao

Institution: University of Science and Technology Beijing

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: gold

Estimated APC paid: $944