IDEAS home Printed from https://ideas.repec.org/a/sae/metjou/v21y2022i2p98-105.html

Estimation of Insurer’s Managerial Ability: A Goal Programming Approach

Author

Listed:
  • Ram Pratap Sinha
  • Bahareh Vaisi

Abstract

Inter-firm performance differences are influenced by several contextual variables, and managerial ability is one important factor that enables some firms to gain leadership positions in the market and helps them to sustain the advantage over successive time periods. However, managerial ability is the cognitive capability which is not directly observable/measurable. In this article, an indirect estimate of managerial ability under a three-stage approach for 20 Indian general insurance companies based on 120 firm-year observations spread over the period 2012–2013 to 2017–2018 is provided. The three-stage estimation method for the measurement of firm-specific managerial ability includes data envelopment analysis (DEA)-goal programming, pooled regression, residual of the pooled regression, Ordinary Least Squares, and General Additive Model regression. Unlike other studies, in this study, DEA-goal programming method is considered to improve discriminatory power for proper classification of the Indian general insurance companies. The results indicate that the influence is statistically significant.

Suggested Citation

  • Ram Pratap Sinha & Bahareh Vaisi, 2022. "Estimation of Insurer’s Managerial Ability: A Goal Programming Approach," Metamorphosis: A Journal of Management Research, , vol. 21(2), pages 98-105, December.
    • Handle: RePEc:sae:metjou:v:21:y:2022:i:2:p:98-105
    DOI: 10.1177/09726225221125063
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/09726225221125063
    Download Restriction: no
    File URL: https://libkey.io/10.1177/09726225221125063?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. M P Estellita Lins & L Angulo-Meza & A C Moreira Da Silva, 2004. "A multi-objective approach to determine alternative targets in data envelopment analysis," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(10), pages 1090-1101, October.
    2. Peter Demerjian & Baruch Lev & Sarah McVay, 2012. "Quantifying Managerial Ability: A New Measure and Validity Tests," Management Science, INFORMS, vol. 58(7), pages 1229-1248, July.
    3. Marianne Bertrand & Antoinette Schoar, 2003. "Managing with Style: The Effect of Managers on Firm Policies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1169-1208.
    4. Rajiv D. Banker & Jingshu Luo & Hyunjin Oh, 2021. "Measuring Managerial Ability in the Insurance Industry," Data Envelopment Analysis Journal, now publishers, vol. 5(1), pages 115-143, June.
    5. Martin Eling & Michael Luhnen, 2010. "Frontier Efficiency Methodologies to Measure Performance in the Insurance Industry: Overview, Systematization, and Recent Developments," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 35(2), pages 217-265, April.
    6. Berger, Allen N. & Hanweck, Gerald A. & Humphrey, David B., 1987. "Competitive viability in banking : Scale, scope, and product mix economies," Journal of Monetary Economics, Elsevier, vol. 20(3), pages 501-520, December.
    7. Hancock, Diana, 1985. "The Financial Firm: Production with Monetary and Nonmonetary Goods," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 859-880, October.
    8. Stewart, Theodor J., 2010. "Goal directed benchmarking for organizational efficiency," Omega, Elsevier, vol. 38(6), pages 534-539, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ram Pratap Sinha, 2026. "Profitability, solvency and managerial ability linkage in Indian insurance Sector- an econometric approach," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 16(1), pages 27-47, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ram Pratap Sinha, 2026. "Profitability, solvency and managerial ability linkage in Indian insurance Sector- an econometric approach," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 16(1), pages 27-47, March.
    2. Cornett, Marcia Millon & Erhemjamts, Otgontsetseg & Tehranian, Hassan, 2019. "Competitive environment and innovation intensity," Global Finance Journal, Elsevier, vol. 41(C), pages 44-59.
    3. Rajiv. D. Banker & Alireza Amirteimoori & Tofigh Allahviranloo & Ram Pratap Sinha, 2024. "Performance analysis and managerial ability in the general insurance market: a study of India and Iran," Information Technology and Management, Springer, vol. 25(1), pages 19-31, March.
    4. Cho, Chanho & Halford, Joseph T. & Hsu, Scott & Ng, Lilian, 2016. "Do managers matter for corporate innovation?," Journal of Corporate Finance, Elsevier, vol. 36(C), pages 206-229.
    5. Fang, Ming & Francis, Bill & Hasan, Iftekhar & Wu, Qiang, 2022. "External social networks and earnings management," The British Accounting Review, Elsevier, vol. 54(2).
    6. Han Li, 2014. "Top Executives¡¯ Ability and Earnings Quality: Evidence from the Chinese Capital Markets," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 5(2), pages 79-86, April.
    7. Francis, Bill & Hasan, Iftekhar & Mani, Sureshbabu & Ye, Pengfei, 2016. "Relative peer quality and firm performance," Journal of Financial Economics, Elsevier, vol. 122(1), pages 196-219.
    8. Najah Attig & Sean Cleary, 2014. "Organizational Capital and Investment-Cash Flow Sensitivity: The Effect of Management Quality Practices," Financial Management, Financial Management Association International, vol. 43(3), pages 473-504, September.
    9. Shang, Chenguang, 2021. "Dare to play with fire? Managerial ability and the use of short-term debt," Journal of Corporate Finance, Elsevier, vol. 70(C).
    10. Alona Bilokha & Sudip Gupta, 2024. "Shareholder litigation rights and firm productivity," Financial Markets, Institutions & Instruments, John Wiley & Sons, vol. 33(2), pages 65-90, May.
    11. García-Meca, Emma & García-Sánchez, Isabel-María, 2018. "Does managerial ability influence the quality of financial reporting?," European Management Journal, Elsevier, vol. 36(4), pages 544-557.
    12. Chen, Yi-Wen & Chu, Li-Hong & Lin, Chu-Bin & Zhao, Ping-Yu, 2025. "CEO gender and M&As: New evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 90(C).
    13. Anam Ashiq & Zhang Guoxing & Aftab Hussain Tabasam & Safdar Husain Tahir, 2025. "The Triple Impact: Managerial Ability, CSR, and Capital Structure on Firm Performance," SAGE Open, , vol. 15(4), pages 21582440251, October.
    14. Gabriel Asaftei & Subal Kumbhakar, 2008. "Regulation and efficiency in transition: the case of Romanian banks," Journal of Regulatory Economics, Springer, vol. 33(3), pages 253-282, June.
    15. Jaspreet Kaur & Madhu Vij & Ajay Kumar Chauhan, 2023. "Signals influencing corporate credit ratings—a systematic literature review," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 50(1), pages 91-114, March.
    16. James, Hui Liang & Ngo, Thanh & Wang, Hongxia, 2023. "The impact of more able managers on corporate trade credit," Journal of Behavioral and Experimental Finance, Elsevier, vol. 40(C).
    17. Kjersti-Gro Lindquist, 2002. "The Effect of New Technology in Payment Services on Banks' Intermediation," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B3-2, International Conferences on Panel Data.
    18. Cai, Xiangshang & Gao, Yang & Wu, Zhiting & Yuan, Jiayi, 2024. "Chief executive officer marital status and corporate credit ratings," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    19. Banker, Rajiv D. & Chang, Hsihui & Lee, Seok-Young, 2010. "Differential impact of Korean banking system reforms on bank productivity," Journal of Banking & Finance, Elsevier, vol. 34(7), pages 1450-1460, July.
    20. Ziyang Li & Qianwei Ying & Yuying Chen & Xuehui Zhang, 2020. "Managerial risk appetite and asymmetry cost behavior: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(5), pages 4651-4692, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:metjou:v:21:y:2022:i:2:p:98-105. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.