Moderating Effects of Managerial Ability on the Nexus Between Stock Prices and Firm Investments Aang Kunaifi, Dian Agustia
Faculty of Economic and Business, Airlangga University
Jl. Airlangga No.4-6, Surabaya City 60115, Indonesia
Abstract
This research investigated the moderating effects of managerial ability on the nexus of stock price and firm investments. Data for this study were collected from Indonesian-listed firms in the capital market from 2016 to 2020. The fixed-effect panel data model with the least square dummy variable was applied. The results reveal that managerial ability moderates the effect of stock prices on firm investments. Findings of this study have managerial and theoretical implications for firms^ investment decision-making. Managerial capability is an important factor that influences the use of stock market information in firm investment decision-making, which is consistent with the managerial learning hypothesis.
