Managerial Ability and Bank Lending Behavior

Sarwar

2021

JCEFTS

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.

Section: Managers Ability and Investment Dynamicsmentioning

confidence: 95%

Managers ability and investment dynamics during the global financial crisis: an emerging market context

Sarwar

2021

JCEFTS

“…In terms of empirical results, Vo et al (2021) recently examined bank lending and focused on how managerial abilities influenced bank lending using 8,379 United States banks between 1990 and 2017. Employing a fixed effect panel data, the results showed that better managed banks lend more regardless of the size of banks.…”

Section: Literature Review: Theory Empirics and Hypothesismentioning

confidence: 99%

“…In terms of empirical results, Vo et al. (2021) recently examined bank lending and focused on how managerial abilities influenced bank lending using 8,379 United States banks between 1990 and 2017.…”

Section: Literature Review: Theory Empirics and Hypothesismentioning

confidence: 99%

What drives bank lending? A closer look at bank lending types in Africa

Ayagre

Dzeha

Kriese

et al. 2022

AJEMS

PurposeIn this study, the authors present unique evidence on bank lending types by paying particular attention to the factors that drive the different types of bank lending in Africa using bank level data.Design/methodology/approachIn presenting such evidence, the study employs a robust fixed effect panel data with year and technological controls comprising 57 banks from 29 African economies between 2006 and 2015.FindingsThe results show that different factors affect different bank lending types differently in Africa. Specifically, while the authors find that total or aggregate bank lending is positively driven by bank capitalization and spread but negatively driven by bank size, corporate and commercial bank lending is positively driven by bank size, spread, inflation, elections and extent of business disclosure but negatively driven by bank capitalization, loan loss reserves, operational cost and gross domestic product per capita. Moreover, interbank lending is both negatively and positively driven by bank capitalization and size, respectively, while other bank lending type is driven positively by financial crisis but negatively driven by bank size, inflation and extent of business disclosure. Finally, retail and consumer lending is positively driven by bank capitalization, loan loss reserves and spread while negatively driven by bank size and inflation.Practical implicationsThese imply that bank managers, regulators, policymakers and researchers must begin to see each bank lending category separately and independently since varying factors influence the different categories of bank lending differently.Originality/valueThe study presents new insights into how different factors determine different lending types in Africa for the first time to the best of the authors’ knowledge.

Proceedings of the 1st International Conference on Sustainable Management and Innovation, ICoSMI 2020, 14-16 September 2020, Bo

“…The role of unobservable managerial ability on bank lending behaviour has been tested by [12]. The empirical results suggest that more able managed banks produce a higher amount of loans.…”

Section: Hyphoteses Developmentmentioning

confidence: 99%

“…Superior managers can read trends better, predict demand more accurately, and invest in more valuecreating projects, therefore connecting themselves with a better financial performance [11]. The more able managed bank will have higher loan quality [12]. The higher of management capability, the better on mitigating the risk and its impact on sustainable financial performance [13].…”

Section: Introductionmentioning

confidence: 99%

Managerial Ability and Sustainable Financial Performance

Novita¹

2021

The banking industry plays a vital role in supporting sustainable economic development. Although indirectly, banks can stimulate the success of sustainable business processes, by adding requirements to environmentally friendly business processes in the financing approval. On the other hand, banks are also required to maintain their sustainable financial performance. This research aims to test the influence of managerial ability on the sustainability of financial performance. This research used listed commercial banks from four ASEAN countries. The data obtained from the website of the stock exchange of Indonesia, Malaysia, Thailand, and Singapore. Managerial ability is measured by using the Managerial Ability Score, which is generated by using Data Envelopment Analysis. The sustainability of financial performance proxied by sustainable growth rate. This research used a random effect model to test the hypotheses. The result shows that managerial ability does not affect sustainable financial performance. This finding indicates that high-interest rates dominate the overall bank performance so that it cannot explain the impact of resource management performance on sustainable financial performance. The findings of this research alone can be a reflection of the need to improve management capabilities in managing resources efficiently.