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Managerial ability and goodwill impairment

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  • Sun, Li

Abstract

This study examines the relationship between managerial ability and goodwill impairment. I predict a negative relationship because prior studies suggest that more-able managers better prevent or reduce goodwill impairment, relative to less-able managers. Regression analysis reveals a significant and negative relationship between managerial ability and goodwill impairment measured as the likelihood of goodwill impairment and the magnitude of goodwill impairment losses. Overall, evidence suggests that managers with greater ability play an important role in preventing or reducing goodwill impairment.

Suggested Citation

  • Sun, Li, 2016. "Managerial ability and goodwill impairment," Advances in accounting, Elsevier, vol. 32(C), pages 42-51.
    • Handle: RePEc:eee:advacc:v:32:y:2016:i:c:p:42-51
    DOI: 10.1016/j.adiac.2016.02.002
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    5. Pallab Kumar Biswas & Dinithi Ranasinghe & Eric K. M. Tan, 2023. "Impact of product market competition on real activity manipulation: Moderating role of managerial ability," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(1), pages 247-275, March.
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    8. Killins, Robert & Ngo, Thanh & Wang, Hongxia, 2021. "Goodwill impairment and CEO overconfidence," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    9. Efstathios Magerakis & Ahsan Habib, 2022. "Environmental uncertainty and corporate cash holdings: The moderating role of CEO ability," International Review of Finance, International Review of Finance Ltd., vol. 22(3), pages 402-432, September.
    10. Lee, Chien-Chiang & Wang, Chih-Wei & Chiu, Wan-Chien & Tien, Te-Sheng, 2018. "Managerial ability and corporate investment opportunity," International Review of Financial Analysis, Elsevier, vol. 57(C), pages 65-76.
    11. Spasić Dejan, 2018. "Do Serbian Companies Provide Relevant Disclosures About Goodwill?," Economic Themes, Sciendo, vol. 56(1), pages 127-138, April.
    12. Ferreira Leonor Fernandes & Fernandes Joaquim Santana & Rebelo Efigénio, 2024. "A Path Analysis of Goodwill Impairment – Does Corporate Governance Matter?," Journal of Intercultural Management, Sciendo, vol. 16(1), pages 5-48, March.
    13. Huang, Qiubin & Xiong, Mengyuan & Xiao, Ming, 2020. "Managerial ability, financial performance and goodwill impairment: A moderated mediation analysis," MPRA Paper 100459, University Library of Munich, Germany.
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    15. Puspita Ghaniy Anggraini & Mahfud Sholihin, 2023. "What do we know about managerial ability? A systematic literature review," Management Review Quarterly, Springer, vol. 73(1), pages 1-30, February.

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