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Management characteristics and corporate performance of Chinese chemical companies: the moderating effect of managerial ability
Author(s) -
Wang WeiKang,
Lu WenMin,
Kweh Qian Long,
Lee JhongJhe
Publication year - 2021
Publication title -
international transactions in operational research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.032
H-Index - 52
eISSN - 1475-3995
pISSN - 0969-6016
DOI - 10.1111/itor.12575
Subject(s) - incentive , business , context (archaeology) , ordinary least squares , quality (philosophy) , partial least squares regression , moderation , marketing , knowledge management , industrial organization , econometrics , economics , microeconomics , computer science , mathematics , statistics , paleontology , philosophy , epistemology , biology
Abstract This study examines the association between management characteristics and corporate performance, as well as how it is moderated by managerial ability among 103 Chinese chemical companies for the period 2008–2010. While we measure management characteristics from the perspectives of human quality, team structure, and economic incentives, we employ dynamic data envelopment analysis to gauge managerial ability. Our ordinary least squares regression results show that management characteristics are positively related to corporate performance, which is proxied by Tobin's Q . Furthermore, we find that managerial ability can further strengthen the positive relationship between management characteristics and corporate performance. In addition, we include graphs highlighting the moderating effects of managerial ability on the relationship between management characteristics and corporate performance. Overall, this study provides a greater understanding of the upper‐echelon theory and insights of managerial ability in a dynamic context.