Managerial Ability And The Curb Of Goodwill Bubbles

Mergers and acquisitions of listed companies at a high premium have become a common phenomenon.Faced with the huge amount of goodwill formed by enterprises,once the potential impairment risk breaks out,it will not only cause the company's business performance to "change face",but also lay huge hidden trouble for the normal order of the market.As the leader of an enterprise,the management's ability will have a significant impact on operating efficiency and risk control.At the same time,the new measurement method of goodwill requires the company to conduct impairment test of goodwill every year.When the profit inflow of enterprise goodwill is lower than the expected value,impairment provision should be made for goodwill.The new impairment method undoubtedly gives the management more power and measurement to determine the fair value of enterprise goodwill,which shows that the management plays an important role in determining the fair value of enterprise goodwill and the impairment of goodwill.So what role does managerial ability play in the process of goodwill formation and impairment? To be tested by empirical research.Taking the A-share listed companies from 2008 to 2018 as samples,this paper uses empirical analysis to study the inhibition of managerial ability and goodwillbubble.It is found that the managerial ability of a company has a significant inhibitory effect on the goodwill bubble.The higher the managerial ability,the less the recognition of excess goodwill and impairment of goodwill.Furthermore shows that the restraint of managerial ability on the company's goodwill bubble is mainly realized by improving the quality of internal control and increasing the company's ability to create value.In the expansion analysis,according to the power structure of the company's management and the degree of attention of institutional investors,the paper makes a group test and finds that in the samples of the separation of the two roles of the company's CEO and the high degree of attention of institutional investors,the managerial ability has a significant inhibitory effect on the company's goodwill bubble.The research in this paper extends the research on the influence of managerial ability on mergers and acquisitions,and also provides new evidence for the construction of the mechanism to restrain the company's goodwill bubble.