Managerial Ability and External Financing

Min Rui Choo, Chih Wei Wang, Chi Yin, Jie Lun Li

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


This research examines the link between managerial ability and firms’ external financing. Our findings show that firms with more able managers tend to mitigate information risk by reducing their loan financing and increasing equity financing. These findings are more prominent for financially unconstrained and well-governed firms, suggesting that high-ability managers are more apt to use equity financing as a financial source in firms with better financial and governance quality. To address potential endogeneity problems, we document that the impact of managerial ability on external financing remains unchanged after we employ yearly regression, change analysis, quantile regression, and the instrumental variable approach.

Original languageEnglish
Pages (from-to)207-241
Number of pages35
JournalAsia-Pacific Financial Markets
Issue number2
StatePublished - Jun 2021


  • Corporate governance
  • Equity financing
  • Financial constraint
  • Loan financing
  • Managerial ability


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