Does managerial ability and auditor report readability affect corporate liquidity and cost of debt?

Dalwai, Tamanna; Habib, Ahmed Mohamed; Mohammadi, Syeeda Shafiya; Hussainey, Khaled

doi:10.1108/ara-06-2022-0151

Cited by 22 publications

(14 citation statements)

References 115 publications

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“…First, Tone [44], Mourad et al [45], Habib [16], and Habib and Shahwan [46] confirm that DEA is a powerful non-parametric technique for analyzing the nexus between inputs and outputs. Second, Dalwai et al [47], Shahwan and Habib [48], Habib and Mourad [11], and Shahwan and Habib [49] confirm that the DEA technique delivers critical information for continual improvement. Finally, Habib and Mourad [11], Shahwan and Habib [49], Cooper et al [50], Mourad [51], and Mourad et al [52] confirm that the DEA technique focuses on the best practice concept as a base of benchmarking, that is, the relatively efficient firm (located on the efficient frontier curve), on the efficiency frontier curve, as opposed to conventional techniques that focus on central tendencies.…”

Section: Wcm Modelmentioning

confidence: 92%

Evaluating the Super-Efficiency of Working Capital Management Using Data Envelopment Analysis: Does COVID-19 Matter?

Habib¹,

Kayani

2023

Oper. Res. Forum

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This study evaluates the working capital management (WCM) super-efficiency in UAE firms and determines how the COVID-19 crisis may affect WCM super-efficiency from a statistical perspective. Data envelopment analysis (DEA), difference tests, and Tobit regression techniques are used. Integration of DEA with Tobit regression is required to recognize the potential statistical consequence of COVID-19 on the super-efficiency of WCM. The results show that WCM super-efficiency is moderate and requires decision-makers' corrective measures to attain best practices. The study results show no significant difference in WCM super-efficiency, and COVID-19 does not significantly influence WCM super-efficiency. The results would rouse decision-makers' interests, who would look into the firm's efficiency and weak spots. They would then take major steps to improve efficiency and achieve the best practices. Stakeholders such as managers, financiers, and investors may need these results to monitor how firms manage their assets and liabilities. We contribute to the literature by investigating and evaluating firms' WCM super-efficiency pre and post the COVID-19 pandemic employing a unique technique based on DEA super-efficiency and examining whether COVID-19 has affected WCM super-efficiency to extend the scope of knowledge and stressing the importance of sound WCM, especially in periods of economic distress.

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Section: Wcm Modelmentioning

confidence: 92%

Evaluating the Super-Efficiency of Working Capital Management Using Data Envelopment Analysis: Does COVID-19 Matter?

Habib¹,

Kayani

2023

Oper. Res. Forum

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“…Fourthly, it is important to provide comparative information regarding WCM and IC performance to help stakeholders make appropriate decisions, thus extending the decision-makers' perceptions and understanding of the inherent role of IC and WCM in firm performance and the need to develop appropriate policies and strategies to enhance IC and WCM to improve a firm's performance. Finally, publicly listed firms in GCC countries operate in environments with unique institutional, economic, and political characteristics (Dalwai et al, 2015(Dalwai et al, , 2023. GCC countries are characterized by a hereditary monarchy that differentiates them through legal structures (Mazaheri, 2013).…”

Section: Introductionmentioning

confidence: 99%

Does the Efficiency of a Firm’s Intellectual Capital and Working Capital Management Affect Its Performance?

Habib¹,

Dalwai

2023

J Knowl Econ

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This study explores the efficiency of intellectual capital (ICE) and working capital management (WCME) in the GCC industrial sector and its potential impact on firm performance. The data were gathered from Standard & Poor’s database from 2015 to 2019. This study uses data envelopment analysis (DEA), regression analysis, and robustness tests to accomplish its aims. The results indicate that most firms do not employ their intellectual and working capital investments well and need improvement actions to achieve the best practices. The regression model results reveal that ICE and WCME significantly and positively influence firms’ performance. The results of this study support the resource-based, trade-off, and pecking order theories. The study findings have important implications for many stakeholders; for example, they would be helpful for firm decision-makers in managing their investments in intellectual and working capital to achieve the best practices and improve a firm's performance. In addition, the findings would be helpful for financiers, because high-performance firms are likely to have more reasonable valuations that facilitate debt financing. Moreover, the findings have noteworthy implications for trading procedures as investors aspire to attractive economic returns for their investments in corporations that pasture ICE and WCME issues. Additionally, these findings have important implications for employee job satisfaction and retention by improving IC management.

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“…Following prior studies (Opler et al , 1999; Harford et al , 2008; Gao et al , 2013; Chen et al , 2020, Dalwai et al ., 2023), we include various factors that influence the firm’s cash holdings. Firm size (FirmSize), measured as the natural logarithm of total assets, is seen as a deterrent for takeovers.…”

Section: Methodsmentioning

confidence: 98%

Intellectual capital efficiency, institutional ownership and cash holdings: a cross-country study

Dalwai,

Mohammadi,

Satrovic

2023

RAF

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Purpose This study aims to investigate the roles of intellectual capital efficiency and institutional ownership on cash holdings and their speed of adjustment. Design/methodology/approach Using a sample of 432 firm-year observations of tourism-listed companies, three measures of cash holdings are used as dependent variables and intellectual capital efficiency and institutional ownership as independent variables. The financial data is collected from the S&P Capital IQ database for the period 2015–2020. Two system-generalized methods of moment estimation are used for the robustness checks of the results. Findings The study provides evidence that an increase in intellectual capital efficiency in tourism firms results in lower cash holdings. The research findings also report that characteristics such as firm size, age and market-to-book value ratio are associated with cash holdings. Furthermore, institutional ownership in these firms did not affect the cash holdings. The results also confirm the existence of a target cash holding level to which the tourism firms attempt to converge. These results are robust to the alternative proxy of cash holding and endogeneity tests. Research limitations/implications The study uses intellectual capital efficiency measured by the model proposed by Pulic. Alternative measures of intellectual capital can be included in future studies. Future research can also investigate the impact on cash holdings before and during the pandemic for tourism companies. The study is limited to the impact of institutional ownership; thus, research can be extended to consider other types of ownership. Practical implications The findings of this study indicate that tourism companies should take into account the impact of intellectual capital efficiency on their cash holding decisions. The industry uses a specific financial management strategy in light of better efficiency and possibly values the opportunity cost of holding more cash. Additionally, regulators should re-examine the role of institutional ownership in tourism firms, as it was found to have no impact on cash holdings. The regulators may need to consider other factors, such as firm size and age, when developing policies and regulations to ensure that tourism firms have adequate cash holdings. Originality/value This study adds to the body of knowledge on the factors that influence cash management and ideal cash levels for the tourism industry. The examination of the effect of intellectual capital on cash holdings is a novel contribution, filling a gap in the existing literature. The findings on the speed of adjustment towards optimal cash holdings also provide support for the trade-off theory.

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Does managerial ability and auditor report readability affect corporate liquidity and cost of debt?

Cited by 22 publications

References 115 publications

Evaluating the Super-Efficiency of Working Capital Management Using Data Envelopment Analysis: Does COVID-19 Matter?

Evaluating the Super-Efficiency of Working Capital Management Using Data Envelopment Analysis: Does COVID-19 Matter?

Does the Efficiency of a Firm’s Intellectual Capital and Working Capital Management Affect Its Performance?

Intellectual capital efficiency, institutional ownership and cash holdings: a cross-country study

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