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295196

The mediation effect of Firm Profitability for the Relationship between Managerial Entrenchment and Firm Value: An Empirical Study

Article

Last updated: 27 Dec 2024

Subjects

-

Tags

علوم المحاسبة وإدارة الأعمال

Abstract

The previous studies about the relationship between managerial entrenchment and firm value are indecisive as these studies implicitly presume that the relationship between managerial entrenchment and firm value is a direct relation. The point that has received less attention in the existing literature is that the relationship between managerial entrenchment and firm value can be mediated by a contextual variable which has a direct relation with firm value such as firm profitability. The purpose of this paper is to investigate the direct effect of the managerial entrenchment on firm value and identifies the mediation effect of firm profitability on the relationship between managerial entrenchment and firm value. To test the study hypotheses, the researcher relied on a sample of 113 Egyptian listed corporation (678 observations) and belonging to 13 non-financial sectors over the period from 2014 to 2019. Using path analysis model, the results show that there is a negative and significant relationship between managerial entrenchment and firm value. And also reveal that there is a positive and significant relationship between managerial entrenchment and firm profitability and a negative and insignificant relationship between firm profitability and firm value. And these results assure that there is no mediation effect of firm profitability on the relationship between managerial entrenchment and firm value. Here, adopting earnings management by the managers may be the reason for the absence of the indirect relationship between managerial entrenchment and firm value.

DOI

10.21608/zcom.2023.200433.1224

Keywords

Managerial Entrenchment, Firm Profitability, Firm value, ROA, Tobin&rsquo؛ s Q

Authors

First Name

Amira

Last Name

Ahmed Mansour Ahmed Ismail

MiddleName

-

Affiliation

Faculty of Commerce, zagazig University

Email

amiraherry1@gmail.com

City

-

Orcid

0009-0005-9461-9051

First Name

Mohamed

Last Name

Mahmoud Soliman

MiddleName

-

Affiliation

Faculty of Commerce, Zagazig University

Email

m.m.soliman2023@gmail.com

City

-

Orcid

-

First Name

Ahmed

Last Name

Hany Behery Hammad

MiddleName

-

Affiliation

Faculty of Commerce, Zagazig University

Email

thecleaver2012@gmail.com

City

-

Orcid

-

Volume

46

Article Issue

1

Related Issue

46036

Issue Date

2024-01-01

Receive Date

2023-03-15

Publish Date

2024-01-01

Page Start

3

Page End

35

Print ISSN

1110-7731

Online ISSN

2735-4512

Link

https://zcom.journals.ekb.eg/article_295196.html

Detail API

https://zcom.journals.ekb.eg/service?article_code=295196

Order

27

Type

تجاریة کل ما یتعلق بالعلوم التجاریة

Type Code

1,572

Publication Type

Journal

Publication Title

مجلة البحوث التجارية

Publication Link

https://zcom.journals.ekb.eg/

MainTitle

The mediation effect of Firm Profitability for the Relationship between Managerial Entrenchment and Firm Value: An Empirical Study

Details

Type

Article

Created At

27 Dec 2024