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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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    2. Lawrence, Akvile & Karlsson, Magnus & Nehler, Therese & Thollander, Patrik, 2019. "Effects of monetary investment, payback time and firm characteristics on electricity saving in energy-intensive industry," Applied Energy, Elsevier, vol. 240(C), pages 499-512.
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    4. KangYoung Lee & SungMan Yoon, 2020. "Managerial Ability and Tax Planning: Trade-Off between Tax and Nontax Costs," Sustainability, MDPI, vol. 12(1), pages 1-13, January.
    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.
    6. Khoo, Joye & (Wai Kong) Cheung, Adrian, 2022. "Managerial ability and debt maturity," Journal of Contemporary Accounting and Economics, Elsevier, vol. 18(1).
    7. Killins, Robert & Ngo, Thanh & Wang, Hongxia, 2021. "Goodwill impairment and CEO overconfidence," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    8. 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.
    9. 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.
    10. Spasić Dejan, 2018. "Do Serbian Companies Provide Relevant Disclosures About Goodwill?," Economic Themes, Sciendo, vol. 56(1), pages 127-138, April.
    11. 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.
    12. Martin Kedron, 2020. "Goodwill and Its Effect on Share Price of Manufacturing and Nonmanufacturing Companies," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 68(2), pages 373-381.
    13. 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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