Managerial ability and corporate investment opportunity

摘要

This study examines whether firms operated by superior managers can obtain more favorable investment opportunities using data on U.S. industrial firms during 1988-2015. The empirical results disclose that there exists a positive relationship between managerial ability and investment opportunity, and that the relation is only significant in financially unconstrained firms or firms in a strong financial position. Overall, our findings support that firms having managers with superior ability could gain more economic profits via better investment opportunity. Through our research, policy makers and investors can pay more attention on managerial ability.