Table 7.
Types of managerial ability.
| Generalist CEOs |
Specialist CEOs |
|||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Investment policies |
Financing policies |
Dividend policy |
Cash holding policy |
Firm performance |
Investment policies |
Financing policies |
Dividend policy |
Cash holding policy |
Firm performance |
|||||||
| (1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
(9) |
(10) |
(11) |
(12) |
(13) |
(14) |
(15) |
(16) |
|
| Variables | M&A | Investment | Short-debt leverage | Long-debt leverage | Dividend | Cash | ROA | ROE | M&A | Investment | Short-debt leverage | Long-debt leverage | Dividend | Cash | ROA | ROE |
| Generalist CEOs | −0.002 | −0.006*** | −0.025*** | −0.010*** | 0.000 | −0.009 | 0.001*** | 0.003*** | ||||||||
| (0.004) | (0.002) | (0.008) | (0.003) | (0.000) | (0.006) | (0.000) | (0.001) | |||||||||
| Specialist CEOs | 0.072* | 0.001 | −0.004 | 0.003 | 0.000 | 0.026*** | 0.000 | 0.000 | ||||||||
| (0.038) | (0.001) | (0.006) | (0.003) | (0.000) | (0.008) | (0.000) | (0.001) | |||||||||
| Duality | −0.004 | 0.003 | −0.003 | −0.001 | −0.001* | 0.000 | 0.001 | 0.001 | −0.085* | 0.001 | −0.004 | −0.001 | 0.000 | 0.017* | 0.001** | 0.003*** |
| (0.009) | (0.003) | (0.017) | (0.006) | (0.000) | (0.012) | (0.001) | (0.001) | (0.044) | (0.001) | (0.007) | (0.004) | (0.000) | (0.009) | (0.001) | (0.001) | |
| Board | 0.005 | −0.000 | 0.003 | 0.002 | −0.000 | 0.007 | −0.000 | −0.000 | −0.019 | −0.000 | 0.001 | 0.001 | 0.000 | 0.002 | 0.000 | 0.001** |
| (0.003) | (0.001) | (0.006) | (0.002) | (0.000) | (0.005) | (0.000) | (0.001) | (0.017) | (0.000) | (0.003) | (0.001) | (0.000) | (0.004) | (0.000) | (0.001) | |
| Independence | −0.007 | 0.002 | 0.007 | 0.005 | 0.000 | 0.002 | 0.000 | 0.000 | 0.080 | −0.001 | 0.006 | 0.002 | −0.000 | −0.018 | −0.000 | −0.002 |
| (0.010) | (0.004) | (0.020) | (0.007) | (0.000) | (0.015) | (0.001) | (0.002) | (0.054) | (0.001) | (0.008) | (0.004) | (0.000) | (0.011) | (0.001) | (0.002) | |
| Institutional | 0.018 | 0.004 | 0.038 | 0.016 | 0.001* | 0.170*** | −0.000 | 0.001 | −0.056 | 0.001 | −0.083*** | −0.017** | 0.002** | 0.107*** | 0.003** | 0.004 |
| (0.018) | (0.007) | (0.034) | (0.012) | (0.001) | (0.025) | (0.001) | (0.003) | (0.095) | (0.001) | (0.015) | (0.008) | (0.001) | (0.019) | (0.001) | (0.003) | |
| State | −0.015 | −0.006* | −0.030 | −0.023*** | −0.002*** | −0.026* | −0.003*** | −0.007*** | −0.045 | −0.001 | 0.008 | −0.001 | −0.000 | 0.019* | −0.003*** | −0.005*** |
| (0.009) | (0.003) | (0.018) | (0.007) | (0.000) | (0.013) | (0.001) | (0.002) | (0.054) | (0.001) | (0.008) | (0.004) | (0.000) | (0.011) | (0.001) | (0.002) | |
| Size | −0.013*** | 0.003* | 0.041*** | 0.023*** | 0.000** | −0.025*** | 0.002*** | 0.003*** | −0.025 | −0.000 | 0.050*** | 0.032*** | 0.000*** | −0.020*** | 0.003*** | 0.005*** |
| (0.004) | (0.001) | (0.007) | (0.003) | (0.000) | (0.006) | (0.000) | (0.001) | (0.022) | (0.000) | (0.003) | (0.002) | (0.000) | (0.004) | (0.000) | (0.001) | |
| Growth | −0.014 | 0.006 | 0.114*** | 0.034*** | −0.000 | −0.046*** | 0.007*** | 0.011*** | 0.328*** | 0.002** | 0.012 | 0.013*** | −0.001 | −0.019 | 0.008*** | 0.016*** |
| (0.011) | (0.004) | (0.021) | (0.008) | (0.000) | (0.016) | (0.001) | (0.002) | (0.060) | (0.001) | (0.009) | (0.005) | (0.000) | (0.012) | (0.001) | (0.002) | |
| Cash flow | −0.036 | 0.025 | −0.357*** | −0.169*** | 0.021*** | 0.667*** | 0.080*** | 0.125*** | −0.904*** | −0.008* | 0.094* | −0.066** | 0.014*** | 0.438*** | 0.076*** | 0.130*** |
| (0.057) | (0.021) | (0.113) | (0.040) | (0.003) | (0.082) | (0.004) | (0.010) | (0.333) | (0.005) | (0.052) | (0.027) | (0.003) | (0.068) | (0.004) | (0.009) | |
| MTB | 0.029*** | −0.000 | 0.049*** | 0.015*** | 0.001*** | 0.011** | 0.001*** | 0.004*** | 0.141*** | 0.001** | 0.023*** | 0.009*** | 0.001*** | 0.007* | 0.001*** | 0.002*** |
| (0.003) | (0.001) | (0.006) | (0.002) | (0.000) | (0.005) | (0.000) | (0.001) | (0.020) | (0.000) | (0.003) | (0.002) | (0.000) | (0.004) | (0.000) | (0.001) | |
| Profitability | −0.029 | 0.004 | −1.317*** | −0.354*** | 0.012*** | 0.208*** | −0.137 | 0.014*** | −0.767*** | −0.191*** | 0.012*** | −0.002 | ||||
| (0.036) | (0.013) | (0.066) | (0.024) | (0.002) | (0.052) | (0.201) | (0.003) | (0.029) | (0.015) | (0.002) | (0.041) | |||||
| Leverage | 0.052** | −0.016** | −0.000 | −0.267*** | −0.017*** | 0.024*** | −0.222* | 0.003* | 0.001 | −0.319*** | −0.022*** | 0.007** | ||||
| (0.021) | (0.008) | (0.001) | (0.030) | (0.001) | (0.003) | (0.124) | (0.002) | (0.001) | (0.025) | (0.001) | (0.003) | |||||
| Industry | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year |
| Time | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year | Year |
| Constant | 0.189* | −0.056 | −0.834*** | −0.459*** | −0.010** | 0.755*** | −0.043*** | −0.077*** | 0.437 | −0.000 | −0.713*** | −0.634*** | −0.011** | 0.888*** | −0.049*** | −0.107*** |
| (0.098) | (0.036) | (0.187) | (0.067) | (0.005) | (0.140) | (0.007) | (0.017) | (0.544) | (0.008) | (0.082) | (0.043) | (0.004) | (0.111) | (0.007) | (0.016) | |
| R2 | 0.033 | 0.016 | 0.301 | 0.320 | 0.155 | 0.106 | 0.275 | 0.154 | 0.029 | 0.037 | 0.249 | 0.267 | 0.158 | 0.130 | 0.290 | 0.171 |
| Observations | 5630 | 5541 | 5630 | 5630 | 4913 | 5630 | 5630 | 5630 | 5244 | 5135 | 5244 | 5244 | 4610 | 5244 | 5244 | 5244 |
Notes. This table reports the results considering the generalist and specialist ability of the CEOs. Variables definitions are located in Appendix A. Standard errors in parenthesis.
*** P < 0.01, ** P < 0.05, *P < 0.1.