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
Last Name
Ahmed Mansour Ahmed Ismail
MiddleName
-Affiliation
Faculty of Commerce, zagazig University
Email
amiraherry1@gmail.com
City
-MiddleName
-Affiliation
Faculty of Commerce, Zagazig University
Email
m.m.soliman2023@gmail.com
City
-Orcid
-Last Name
Hany Behery Hammad
MiddleName
-Affiliation
Faculty of Commerce, Zagazig University
Email
thecleaver2012@gmail.com
City
-Orcid
-Link
https://zcom.journals.ekb.eg/article_295196.html
Detail API
https://zcom.journals.ekb.eg/service?article_code=295196
Type
تجاریة کل ما یتعلق بالعلوم التجاریة
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