Firm performance during the Covid-19 crisis: Does managerial ability matter?

Challenged by the Covid-19 crisis, CEOs must rethink about how to operate and exist in the new working environment. We examine if managerial ability of the CEO impacts firm performance during the crisis period. We find a positive and significant association between the CEO managerial ability and both the cumulative raw and abnormal returns. We also find that firms with better CEO managerial ability are more resilient and have higher ROE than their counterparts. We find that the CEOs with higher managerial ability have higher pre-pandemic liquidity which in part explains the better performance amid the Covid-19 crisis.