Are top managers important for firm performance and idiosyncratic risk? Evidence from sharia vs non-sharia-compliant firms in the UK and Pakistan

We examine the impact of top managers on performance and idiosyncratic risk of the sharia-compliant firms in the UK and Pakistan by constructing a manager-firm matched panel data and then tracking the role of individual top managers across different firms. The results regarding the individual effects on performance by a particular firm show that there exists a significant difference for managers who move from a non-sharia to a sharia-compliant firm. However, this difference is not significant for managers who move from a sharia-compliant firm to another sharia firm. Policy implications of the findings are discussed.