The Role of Managerial Ability in Firm Investment Opportunities and Performance of Non Financial Firms, A Mediating Role of Corporate Governance

Abstract

The current study focused on investigating the influence of management ability on the investment opportunity and firm performance. The managerial ability has a strategic impact on firm performance and value. Secondary data was employed. The study takes 369 non-financial firms as a population of the study and 196 firms as sample size selected randomly. The data was collected from 2008 to 2017. The managerial ability, cash holdings and dividend payout have a significant effect on the firm performance (ROA). Corporate governance has significant effects on the independent variables and ROA. The findings suggested that managerial ability, cash holdings and dividend payout have significant effects on firm investment opportunities (total Q). Corporate governance has positive and significant effects among independent variables and total Q (TTQ). It has been recommended that managers with superior abilities correlate themselves with a better investment opportunity.

Monitoring and Efficiency in Governance: A Measure for Sustainability in the Islamic Banking Industry

“…Non-financial companies typically have high amounts of debt to pay and their corporate governance is also impaired ( Mubeen et al, 2020 ; Nawaz et al, 2020 ). Maximum ownership usually resides within families, meaning the decisions of the firm serve their personal interests ( Abbas et al, 2019d ; Aman et al, 2019 ; Zhou et al, 2022 ), ultimately this can undermine the interests of minority shareholders.…”