Article Sidebar

Download
PDF
Statistic
Read Counter : 182 Download : 452

Main Article Content

Abstract

Profits are generated by managing assets and using them wisely to create revenues that exceed costs. This study aimed to analyse the effects of managerial competence on firm profitability listed in the Dar es Salaam stock exchange (DSE). The quantitative research design was used to collect, analyse and interpret data in this research while Panel Regression Model was selected to analyse the influence of Managerial competence on profitability of listed firms. POLS technique was used to check robustness and Diagnostic tests were used to meet the criteria of regression analysis. The regression analysis indicate that managerial competence had a significant effect on firm profitability. Raising managerial competence has the potential to significantly increase business profitability, as managers play a key role in an organization's overall functioning. The researchers suggested that shareholders should thoroughly analyse potential managers' competencies and credentials before allocating managerial duties since hiring a competent management team is likely to have a beneficial impact on the firm's profitability. Shareholders should strive to reduce the risk of choosing managers who lack the requisite abilities to maximize the firm's profitability by performing due diligence in the selection process.

Keywords

Profitability Management Competence Stock Exchange

Article Details

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
Mwenda, B., Ngollo, M., & Mwasota, A. (2023). An Empirical Study on the Effects of Managerial Competence on Firm Profitability. Ilomata International Journal of Tax and Accounting, 4(3), 491-507. https://doi.org/10.52728/ijtc.v4i3.794

References

  1. Ajanthan, A. (2013). A Nexus between Liquidity & Profitability: A Study of Trading Companies in Sri Lanka. European Journal of Business and Management, 7(5), 221–237.
  2. Akinleye., G., & Ademiloye, D. (2018). Dividend Policy and Performance of Quoted Manufacturing Firms in Nigeria. International Journal of Scientific & Engineering Research, 9(7), 1768– 1784.
  3. Alarussi, A., S., Alhaderi, S., & M. (2018). Factors affecting profitability in Malaysia. Journal of Economic Studies, 45(3), 442–458. https://doi.org/10.1108/JES-05-2017-0124.
  4. Assenga, P., Aly, D., & Hussainey, K. (2018). The impact of board characteristics on the financial performance of Tanzanian firms. Corporate Governance: The International Journal of Business in Society, 18(6). org/10.1108/CG-09-2016-0174.
  5. Ayako, A., Kungu, G., & Githui, T. (2015). Determinants of the Performance of Firms Listed At the Nairobi Securities Exchange. Research Journal of Finance and Accounting, 6(12), 157–164.
  6. Bae, J., Kim, S., & Oh, H. (2017). Taming polysemous signals: The role of marketing intensity on the relationship between financial leverage and firm performance. Review of Financial Economics, 33(1). org/10.1016/j.rfe.2016.12.002.
  7. Banafa, A. M., W., & Ngugi, K. (2015). The impact of leverage on financial performance of listed non-financial firm in Kenya. International Journal of Finance and Accounting, 4(7), 1–20.
  8. Batchimeg, B. (2017). Financial performance determinants of organizations: The case of Mongolian companies. Journal of Competitiveness, 9(3). https://doi.org/10.7441/joc.2017.03.02.
  9. Biorn, E. (2017). Economics of Panel Data; Methods and Applications. Oxford University Press.
  10. Bist, J., Mali, R., Sabita, P., Jha, R., Sachyam, K., & Bhattarai, S. (2017). Impact of firm characteristics on financial performance of insurance companies in Nepal. Osmania Journal of International Business Studies, 12(1), 1–11 10 1108 –09–2017–0029.
  11. Borda, A., Geleilate, J., Newburry, W., & Kundu, S. (2017). Firm internationalization, business group diversification and firm performance: The case of Latin American firms. Journal of Business Research, 113(doi), 10 1016 2016 11 006 0148–2963.
  12. Bryman, A. (2016). Social Research Methods, (5thEdition. Oxford University Press.
  13. Chandrapala, P., & Knápková, A. (2013). Firm-specific factors and financial performance of firms in the Czech Republic. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 61(7), 2183–2190. https://doi.org/10.11118/actaun201361072183.
  14. Creswell, J. W., & Plano Clark, V. L. (2018). Designing and conducting mixed methods research. SAGE Publications.
  15. Daniel, M., & Tilahun, A. (2013). Firm specific factors that determine insurance company listed, Performance in Ethiopia. European Scientific Journal, 10(9), 245–255. https://doi.org/10.19044/esj.2013.v9n10p
  16. Dioha, C. M., N., & Okpanachi, J. (2018). Effect of firm characteristics on profitability of listed consumer goods companies in Nigeria. Journal of Accounting, Finance and Auditing Studies, 4(2), 14–31. org/10.19044/esj.2019.v15n1p93.
  17. Jin, G., Jiang, Q., & Liu, X. (2022). Customer Concentration, Managerial Ability, and Corporate Performance. Frontiers in Psychology, 12.
  18. Kazibudzki, P. T. (2023). Competence of managers from the perspective of corporate social responsibility: The case study. International Journal of Multidisciplinary Research and Growth Evaluation.
  19. Lazăr, S. (2016). Determinants of firm performance: evidence from Romanian listed companies. Review of Economic and Business Studies, 9(1), 53–69. https://doi.org/10.1515/rebs-2016-0025
  20. Matar, A., & Eneizan, B. (2018). Determinants of financial performance in the industrial firms: Evidence from Jordan. Asian Journal of Agricultural Extension, Economics & Sociology, 22(1), 1–10. https://doi.org/10.9734/AJAEES/2018/37476.
  21. Mule, K. R., Mukras, M. S., Nzioka, O., & M. (2015). Corporate size, profitability and market value: An econometric panel analysis of listed firms in Kenya.13(11 (pp. 376–396). https://doi.org/10.10016/j.ijhm.2015.03.009.
  22. Mutende, E. A., Mwangi, G. M., Njihia, J. M., & Ochieng, D. E. (2017). The moderating role of firm characteristics on the relationship between free cash flows and financial performance of firms listed at the Nairobi securities exchange. Journal of Finance and Investment Analysis, 6(4), 1–3.
  23. Mwenda, B., & Magwana, I. (2022). Nexus Between Corporate Social Responsibility Disclosure and Profitability of Firms Listed at Dar Es Salaam Stock Exchange. Jurnal Manajemen Dayasaing, 24(2), 122–132. https://journals.ums.ac.id/index,DOI:
  24. Mwenda, B., Ndiege, B. O., & D, P. (2021). Influence of Firm-Specific Factors on Performance of Firms Listed at Dar es Salaam Stock Exchange, Tanzania. East African Journal of Social and Applied Sciences, 3(2), 1–15. https://doi.org/10.1007/978-3-030-68836-3_24
  25. Mwenda, B., Ngollo, M., & Mwasota, A. (2023). Effects of Macroeconomic Variables on Performance of Listed Firms at Dar es Salaam Stock Exchange.
  26. Nwanna, I., & Ivie, G. (2017). Effect of financial leverage on firm’s performance: A study of Nigerian banks. International Journal of Recent Scientific Research, 8(7), 18554–18564. https://doi.org/10.24327/ijrsr.2017.0807.0530.
  27. Omondi, M., & Muturi, W. (2013). Factors affecting the financial performance of listed companies at the Nairobi Securities Exchange in Kenya. Research Journal of Finance and Accounting, 4(15), 99–104.
  28. Pantea, M., Gligor, D., & Anis, C. (2014). Economic determinants of Romanian firms’ financial performance. Procedia-Social and Behavioral Sciences, 124, 272–281. org/10.1016/j.sbspro.2014.02.486.
  29. Pervan, M., Pervan, I., & Ćurak, M. (2017). The influence of age on firm performance: evidence from the Croatian food industry. Journal of Eastern Europe Research in Business and Economics, 7(1). https://doi.org/10.5171/2017.618681.
  30. Rwechungura, K., Kaleshu, J., & Ndiege, B. (2020). Stability and Profitability of Commercial Banks in Tanzania. East African Journal of Social and Applied Sciences,2(1, 76.
  31. Siwandeti, M., Sanga, C., & Panga, F. (2021). Technological factors influencing vendors’ participation in public electronic procurement system in Ilala, Tanzania. East African Journal of Social and Applied Sciences, 3(1), 91–102.
  32. Sumaira, B., & Amjad, T. (2013). Determinants of profitability panel data evidence from Insurance sector of Pakistan. Elixir Financial International Management Journal, 57(3), 14377–14382.
  33. Tailab, M. M. (2014). Analyzing factors effecting profitability of non-financial US firms. Research Journal of Finance and Accounting, 22(5), 17–26.
  34. Taouab, O., & Issor, Z. (2019). Firm performance: Definition and measurement models. European Scientific Journal,15(1),93-106.
  35. Too, I., & Simiyu, E. (2019). Firms characteristics and Financial Performance of general insurance firms in Kenya. International Journal of Business Management and Finance, 2(1), 672–689.
  36. Ubesie, M. (2014). of Firms Specific Factors That Determine Financial Performance of the Nigerian Breweries Sector. International Journal of Science And, nology.29 (1). org/10.21512/bbr.v9i1.4047.
  37. Zainudin, N. R., Mahdzan, N. S., & Leong, E. S. (2018). Firm-specific internal determinants of profitability performance: An exploratory study of selected life insurance firms in Asia. Journal of Asia Business Studies, 12(4), 533–550. https://doi.org/10.1108/JABS-09-2016-0129