Impact of leverage and managerial skills on shareholders' return
The recent financial crisis that saw an increase in the risk premium and shareholders’ return around the world is partly caused by the management use of excessive leverage. This paper investigates the effect of leverage and managerial skills on shareholders’ return. Our regression analysis that acco...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2013
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| Online Access: | http://psasir.upm.edu.my/id/eprint/28403/ http://psasir.upm.edu.my/id/eprint/28403/1/Impact%20of%20leverage%20and%20managerial%20skills%20on%20shareholders.pdf |
| _version_ | 1848846107396800512 |
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| author | Tunde, Matemilola Bolaji Amin Noordin, Bany Ariffin Wan Ngah, Wan Azman Saini |
| author_facet | Tunde, Matemilola Bolaji Amin Noordin, Bany Ariffin Wan Ngah, Wan Azman Saini |
| author_sort | Tunde, Matemilola Bolaji |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | The recent financial crisis that saw an increase in the risk premium and shareholders’ return around the world is partly caused by the management use of excessive leverage. This paper investigates the effect of leverage and managerial skills on shareholders’ return. Our regression analysis that accounts for managerial skill factors reveals that leverage has a positive relationship with shareholders’ return. Similarly, managerial skills have a positive relationship with shareholders’ return. Based on the findings, the study suggests that leverage and managerial skills may be priced in equity valuation. We develop an index measure of managerial skills and use the upper-echelon theory of the management literature to explain how managerial skills relate to shareholders’ return. |
| first_indexed | 2025-11-15T08:57:27Z |
| format | Article |
| id | upm-28403 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T08:57:27Z |
| publishDate | 2013 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-284032016-09-05T07:07:32Z http://psasir.upm.edu.my/id/eprint/28403/ Impact of leverage and managerial skills on shareholders' return Tunde, Matemilola Bolaji Amin Noordin, Bany Ariffin Wan Ngah, Wan Azman Saini The recent financial crisis that saw an increase in the risk premium and shareholders’ return around the world is partly caused by the management use of excessive leverage. This paper investigates the effect of leverage and managerial skills on shareholders’ return. Our regression analysis that accounts for managerial skill factors reveals that leverage has a positive relationship with shareholders’ return. Similarly, managerial skills have a positive relationship with shareholders’ return. Based on the findings, the study suggests that leverage and managerial skills may be priced in equity valuation. We develop an index measure of managerial skills and use the upper-echelon theory of the management literature to explain how managerial skills relate to shareholders’ return. Elsevier 2013 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/28403/1/Impact%20of%20leverage%20and%20managerial%20skills%20on%20shareholders.pdf Tunde, Matemilola Bolaji and Amin Noordin, Bany Ariffin and Wan Ngah, Wan Azman Saini (2013) Impact of leverage and managerial skills on shareholders' return. Procedia Economics and Finance, 7. pp. 103-115. ISSN 2212-5671 10.1016/S2212-5671(13)00224-4 |
| spellingShingle | Tunde, Matemilola Bolaji Amin Noordin, Bany Ariffin Wan Ngah, Wan Azman Saini Impact of leverage and managerial skills on shareholders' return |
| title | Impact of leverage and managerial skills on shareholders' return |
| title_full | Impact of leverage and managerial skills on shareholders' return |
| title_fullStr | Impact of leverage and managerial skills on shareholders' return |
| title_full_unstemmed | Impact of leverage and managerial skills on shareholders' return |
| title_short | Impact of leverage and managerial skills on shareholders' return |
| title_sort | impact of leverage and managerial skills on shareholders' return |
| url | http://psasir.upm.edu.my/id/eprint/28403/ http://psasir.upm.edu.my/id/eprint/28403/ http://psasir.upm.edu.my/id/eprint/28403/1/Impact%20of%20leverage%20and%20managerial%20skills%20on%20shareholders.pdf |