Three essays on corporate finance

Abstract

The third essay examines the relationship between managerial ability and firm innovation in terms of quantity, quality and efficiency. In today's corporate framework where decisions are made by the top management team, we expect managerial ability to play a key role among a wide array of factors that determine the innovative success. We find positive and significant link between managerial ability and innovation after controlling for a large set of relevant variables. Our findings contribute to the literature on managers and their importance for firm performance. We also contribute to the innovation literature by identifying an important driver of firm innovation. Particularly, we show that managerial ability plays a key role in technological advancement.