Journal articles on the topic 'Firm purpose'
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1
Madras Gartenberg, Claudine, and George Serafeim. "Corporate Purpose and Firm Ownership." Academy of Management Proceedings 2019, no. 1 (August 1, 2019): 14997. http://dx.doi.org/10.5465/ambpp.2019.191.
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Palmer, Bob. "‥ And a firm purpose of amendment." European Eating Disorders Review 6, no. 2 (June 1998): 147–48. http://dx.doi.org/10.1002/(sici)1099-0968(199806)6:2<147::aid-erv242>3.0.co;2-b.
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Putterman, Louis. "The Firm as Association Versus the Firm as Commodity." Economics and Philosophy 4, no. 2 (October 1988): 243–66. http://dx.doi.org/10.1017/s0266267100001073.
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Recent years have seen the flowering of a new literature on the economic nature of firms marked by a concern with their internal organization and contractual characteristics. Related literatures on the principal-agent problem and the theory of financial markets have also contributed to a better understanding of firms as economic institutions. However, the place of the concept of the ownership of the firm is poorly developed in most of this literature, with many writers either ignoring the concept entirely or arguing that it is of no importance. The purpose of the present article is to point out that the concept of ownership of firms is crucial to an understanding of internal governance issues. Most economists implicitly presume that firms must be ownable and saleable if they are to be operated efficiently, and recently this viewpoint has been made more explicit by writers such as Jensen and Fama and Williamson. Their point of view is to some degree at odds with views of the firm as a coalition, which frequently appear in the same literature, and even more fundamentally in conflict with conceptions of the firm as an association or polity within which greater or lesser degrees of democracy in governance may be pursued. The first purpose of this article is to show that the incompletely articulated position of the leading authors on the economics of organization is that the firm is a commodity and must be so for purposes of efficiency.
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Campbell, Andrew. "Brief case: The purpose of the firm." Long Range Planning 26, no. 6 (December 1993): 140–41. http://dx.doi.org/10.1016/0024-6301(93)90217-4.
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Min, Heechul. "Importing and Firm Productivity: Evidence from Korean Manufacturing Firms." Journal of Korea Trade 26, no. 3 (May 30, 2022): 102–16. http://dx.doi.org/10.35611/jkt.2022.26.3.102.
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Purpose - This paper empirically investigates the relationship between firm productivity and importing intermediate inputs in the Korean manufacturing sector.
Design/methodology - This paper tests the two related hypotheses on the relationship between importing and productivity for a sample of Korean manufacturing firms. We test the self-selection hypothesis by comparing pre-entry levels of productivity between importers and non-importers. We test the learning-by-importing hypothesis by employing propensity score matching with differencein- differences approach.
Findings - Future importers are more productive than future non-importers years before they start to import, which supports the self-selection hypothesis. In contrast, there is no strong evidence for learning-by-importing.
Originality/value - This paper is the first study to explore the relationship between importing and firm-level productivity for Korean firms. The results have an important implication on trade policies to lower or raise trade barriers in imported inputs.
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Chien, Yu-Tai, and Hsin-Min Lu. "Firm websites and the risk of firm." Industrial Management & Data Systems 115, no. 3 (April 13, 2015): 504–20. http://dx.doi.org/10.1108/imds-09-2014-0276.
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Purpose – Websites have become an important channel for firms to communicate with their stakeholders. Higher web site traffic could represent effective information disclosure and higher investor recognition. Both may reduce the risk of firm by reducing the level of information asymmetry and facilitating a more complete market by reaching to more potential investors. The purpose of this paper is to investigate the impact of firm web site traffic to the risk of firm. Design/methodology/approach – The authors conducted a cross-sectional study on the risk and firm web site traffic data of 4,122 US public firms. Findings – After controlling for confounding factors, web site traffic is significantly negatively associated with three firm risk measures: cost of equity, return volatility, and analyst forecast dispersion. Originality/value – The results provide new insights to the economic impact of web site traffic. Compared with previous studies that mostly investigated the relationships between web site traffic and firm performance measured by stock returns or company profitability, the authors documented empirical evidence that web site traffic influences the risk of firm through the level of information asymmetry and investor recognition. This paper suggests that when valuing a firm, investors would take web site traffic into consideration. Firm managers could use firm Websites as a channel to reduce information asymmetry, and increase investor recognition that can contribute to the firm’s value through reduced risk.
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Levillain, Kevin, and Blanche Segestrin. "On Inventing the Purpose-Driven Enterprise." Valuation Studies 6, no. 1 (February 1, 2019): 87–93. http://dx.doi.org/10.3384/vs.2001-5992.196187.
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In this article we present the main lineaments for a reform of the business corporation introducing the purpose of the firm. In France, a report commissioned by the government recommends that two new concepts should be introduced in law: the raison d’être of the firm and “purpose-driven enterprises.” This reform partly originated in a research program carried out in France after 2009. The legal articulation of a so-called “purpose-driven enterprise” has now taken off, first in the US and now in France and elsewhere. It paves the way to introducing sustainability issues and new valuations processes in corporate governance.
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Raja, J., and A. Suresh Kumar. "Influence of Age and Size on Firm Performance-A Comparative Study of Manufacturing and Service Sectors." Asia Pacific Business Review 1, no. 2 (July 2005): 91–103. http://dx.doi.org/10.1177/097324700500100211.
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This paper addresses the issue of firm age and asset (Size) impact on firm performance. The main purpose of this paper is to find, whether firms age and asset can behave in similar fashion across industries particularly in manufacturing and service industries. The results show that manufacturing firms are older and slightly better profitable than services firms. The age of the firm is significant but negatively related to services firms The firm age does not produce any result for many facturing firms. Interestiingly, the total asset of the manufacturing firms’ is significantly related to firm performance, but it produces negative relationship between firm asset and firm perfprmance. The firm asset does not yield any results for service firms. Finally, it is concluded that the age and asset of the firm behaves differntly according to the industry charcterstics.
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Kilenthong, Pitsamorn, Claes M. Hultman, and Gerald E. Hills. "Entrepreneurial marketing behaviours: impact of firm age, firm size and firm’s founder." Journal of Research in Marketing and Entrepreneurship 18, no. 1 (July 11, 2016): 127–45. http://dx.doi.org/10.1108/jrme-05-2015-0029.
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Purpose The purpose of this paper is to empirically test whether a systematic relationship exists between firms’ level of entrepreneurial marketing (EM) behaviours and firms’ characteristics, including firm age, firm size and firm’s founder. Design/methodology/approach This paper quantitatively investigates EM behaviours from data collected from 752 business owners through structured interviews. The data analysis applied was multi-group confirmatory factor analysis (multi-group CFA). Findings Results from the analysis show that not all of the firms’ characteristics determine firms’ level of EM practice. The level of EM behaviours has a systematic relationship with firms’ age but not with the founding status of the firms’ manager. The impact of firm size on the level of EM behaviours is evident only when the firms’ age is taken into account. Research limitations/implications This paper concludes that relationships between EM behaviours and firm characteristics are more complicated than anticipated. Firms’ characteristics alone may not be a good measure for identifying the level of a firm’s EM. EM cannot be conceptualized solely in relation to the activities of small firms, young firms or founder-operated firms. Originality/value This paper examines EM behaviours in a large survey and uses multi-group CFA to examine firms’ EM practice through latent variables, instead of observed variables. The findings should complement knowledge regarding the EM concept generated from existing literature.
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Solakoglu, Mehmet Nihat, and Nazmi Demir. "The role of firm characteristics on the relationship between gender diversity and firm performance." Management Decision 54, no. 6 (July 11, 2016): 1407–19. http://dx.doi.org/10.1108/md-02-2015-0075.
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Purpose – The purpose of this paper is to understand the effect of gender diversity on firm performance and evaluate how that relationship is influenced by some firm-specific factors for firms in an emerging market. Design/methodology/approach – The authors collected firm level financial data and firm level characteristics for the firms listed in BIST100 index of Borsa Istanbul for the period between 2002 and 2006. Due to endogeneity of gender diversity and firm performance, the authors utilize unbalanced panel data with 2SLS specification. To observe the sensitivity of results across measures of performance, three measures of performance, two accounting-based and one market-based, are utilized. Findings – Overall, the authors find some weak evidence that gender diversity impacts firm performance. In particular, the findings imply significant association between gender diversity and firm performance for firms that are targeting local markets, for firms in the financial sector and for firms that are family or block-owned. Moreover, findings are fragile with respect to the measures of diversity and performance selected. Originality/value – Although the relationship between gender diversity and firm performance are investigated several times in the past, there are not many studies that examines the role of firm-specific factors on that relationship. By revealing the factors that are important, this study provides an explanation why the existing literature leads to mixed results.
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Wei, Peihwang, Li Xu, and Bei Zeng. "Corporate hedging, firm focus and firm size: the case of REITs." Managerial Finance 43, no. 3 (March 13, 2017): 313–30. http://dx.doi.org/10.1108/mf-05-2016-0134.
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Purpose The purpose of this paper is to investigate the substitutability of corporate hedging and diversification in the real estate investment trusts (REITs) industry. The authors hypothesize that, relative to diversified firms, focused firms are more likely to be associated with hedging. The role of firm size is also analyzed. Design/methodology/approach The logistic regression approach is utilized to analyze the probability of hedging and the panel regression approach is used to examine the amount of hedging. Findings The authors find that, relative to diversified firms, firms focused on a single property type are more likely to engage in hedging. However, this finding is significant only for smaller firms, which implies a non-linear relation between hedging and firm size. The evidence is not as strong when firm focus is measured by geographic concentration. In terms of hedging amount, smaller firms’ average hedge ratio is greater than that of larger firms. For either small or large firms group, hedging amounts increase with firm focus measured by either property or geographic concentration and increase with firm sizes. Research limitations/implications The results imply that, relative to diversified REITs, REITs focused on a single property type are more likely to engage in hedging. However, this finding is significant only for smaller firms, which implies a non-linear relation between hedging and firm size. The evidence is not as strong when firm focus is measured by geographic concentration, suggesting that geographic concentration is perceived to be less risky than property type concentration. For either small or large firms group, hedging amounts increase with firm focus measured by either property or geographic concentration and increase with firm sizes, which implies that hedging amount does not depend on firm size. The sample period is limited to the years 2010 to 2013 because some data needs to be manually collected. Practical implications The results imply that REITs consider both property diversification and hedging in managing their risk. Originality/value The research represents an early attempt to investigate the relation between corporate hedging and diversification. The investigation into the REIT industry has several advantages such as a lower likelihood of using derivatives for speculation.
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Löfsten, Hans. "Business and innovation resources." Management Decision 54, no. 1 (February 8, 2016): 88–106. http://dx.doi.org/10.1108/md-04-2015-0139.
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Purpose – The purpose of this paper is to analyze how new technology-based firms’ (NTBF) business and innovation resources affect firm survival. Design/methodology/approach – The study leverages a data set comprised of 131 Swedish NTBFs located in 16 incubators. The first part of the analysis investigates the determinants of firm survival, and the second presents a statistical analysis. The business resources examined in this study consist of business planning and localization variables and four latent variables are developed. Patents at the firm start or during the firm’s first three years are considered as innovation resources. Findings – First, this study shows that the latent business plans variable has a significant positive connection with firm survival. Second, patent development during firms’ initial years is critical to firm survival. Originality/value – This study is longitudinal, with the first data collection occurring in 2005 and the second in 2014. The firms’ 2013 annual reports suggest that the firms’ survival rate is 55 percent. This longitudinal research that spans eight years shows how the development of patents is highly significant to firm survival.
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Nhung Nguyen, Thi Hong. "Evaluating the Heterogeneous Effect of Firm Risk on Firm Value." SEISENSE Journal of Management 3, no. 5 (September 4, 2020): 24–32. http://dx.doi.org/10.33215/sjom.v3i5.430.
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Purpose- This paper aims to investigate the effect of firm risk on the firm value to see how the firm value is changing when the risk level is changed. Our result indicates that a higher level of risk can reduce firm value. Design/Methodology- We apply a Bayesian causal technique for a sample data set of US public firms. The causal approach helps us to focus on the reliable and unbiased results instead of the association-based findings. Findings- The results show a negative effect of risk on the firms’ value for the sample data. However, we investigate the potential effect of the risk across the distribution of the firm value. We witness the more substantial effect of risk on firms with a higher value. Practical Implications- Helps firms to evaluate their risk and its effect, so they can adjust their decisions and take actions to reduce the undesired effects of firm risk.
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Martinez-Sanchez, Angel, and Fernando Lahoz-Leo. "Supply chain agility: a mediator for absorptive capacity." Baltic Journal of Management 13, no. 2 (April 3, 2018): 264–78. http://dx.doi.org/10.1108/bjm-10-2017-0304.
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Purpose The purpose of this paper is to analyse the mediating effect of supply chain agility (SCA) in the relationship between absorptive capacity (AC) and firm performance. Design/methodology/approach The authors use data from 231 Spanish firms and test the hypothesis by structural equation modelling. Findings SCA mediates the relationship between AC and firm performance. Research limitations/implications The cross-sectional survey and the use of managerial perceptions may need to use longitudinal and real measures in future studies to validate causal relationships. Practical implications SCA may contribute to explain why AC improves firm performance. Firms with more agile supply chains may benefit more from their efforts in AC to improve firm performance. Originality/value A conceptual framework has been developed to explain the relationships of the main constructs of the study (AC and SCA) with firm performance and whether SCA mediates the relationship between AC and firm performance.
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Wasiuzzaman, Shaista. "Working capital and firm value in an emerging market." International Journal of Managerial Finance 11, no. 1 (February 2, 2015): 60–79. http://dx.doi.org/10.1108/ijmf-01-2013-0016.
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Purpose – The purpose of this paper is to examine the relationship between working capital efficiency and firm value and the influence of financing constraints on this relationship. Design/methodology/approach – Data from 192 firms spanning a period of ten years (1999-2008) are used for this purpose and analyzed using the ordinary least squares regression technique. Findings – The study finds that improvements in working capital efficiency through reduction in working capital investment results in higher firm value. However, this relationship is influenced by the financing constraints faced by a firm. For financially constrained firms, working capital efficiency significantly increases firm value but it is found to be insignificant for unconstrained firms. Originality/value – To the author’s knowledge, this is the first study on the value of working capital in Malaysia or in any emerging market. Most studies on working capital valuation concentrate on developed countries and that too are only a handful. Hence this study contributes to the scarce literature on the valuation of working capital. This study also uses the model by Fama and French (1998) to evaluate the relationship between working capital and firm value, which has hardly been used in studies on working capital valuation.
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Muller-Kahle, M. I., Liu Wang, and Jun Wu. "Board structure: an empirical study of firms in Anglo-American governance environments." Managerial Finance 40, no. 7 (June 3, 2014): 681–99. http://dx.doi.org/10.1108/mf-04-2013-0102.
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Purpose – With boards of directors playing both monitoring and guidance roles, the purpose of this paper is to examine the impact of board structure on firm value in large US and UK firms using the lenses of agency and resource dependence theories. Design/methodology/approach – Using a sample of firms in the USA and the UK from 2000 to 2007, the paper conducts a panel data analysis of the impact of board structure on firm value and examine the nuances of different governance environments. Findings – The paper finds distinct differences in the impact of board independence, board size, and outside director busyness on firm value between UK and US firms. Specifically, the paper finds that board independence, board size, and board busyness all have a significant positive impact on firm value in the UK. However, the paper finds no significant relationship between board independence and firm value among US firms. Both board size and board busyness are found to be positively associated with firm value in the USA. Social implications – The paper finds strong support for resource dependence theory in the UK but limited support for agency theory in the USA. Originality/value – This paper takes a multi-country approach to examining the impact of board structure on firm value.
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Malik, Muhammad Shaukat, and Nida Zahoor. "Do Females In Top Management Affect Firm Performance? Evidence From Pakistan." Pakistan Journal of Gender Studies 12, no. 1 (March 8, 2016): 101–12. http://dx.doi.org/10.46568/pjgs.v12i1.202.
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The purpose of this research is to examine the impact of females on top management on firm performance. For this purpose, proportion of the females on top management and firm performance are considered. Secondary data of KSE-100 index firms is used from the year 2010 to year 2014 for this research. STATA 13 is employed to analyze the data and formulate the results. Results revealed that the impact of females in top management on firm performance changes with the job they perform. There is significantly negative impact of female top managers on firm performance. Whereas, females on board does not have any significant impact on firm performance.
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Maria Moreno, Ana, Jose A. Zarrias, and Jose L. Barbero. "The relationship between growth and volatility in small firms." Management Decision 52, no. 8 (September 9, 2014): 1516–32. http://dx.doi.org/10.1108/md-10-2013-0509.
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Purpose – The purpose of this paper is to investigate the effect of predictors of growth (entrepreneurial orientation (EO) and environmental hostility) and growth itself on small-firm volatility. The objective is to find out: first, whether growth and volatility possess a similar nature; second, what are the predictors of small-firm volatility. Design/methodology/approach – Questionnaire data were collected from CEOs of 433 Spanish small firms (<500 employees) who provided qualitative as well as quantitative information. Findings – The authors find that some of the predictors on growth can also be used to predict firm volatility. Specifically, the authors find that firm volatility is influenced by EO and environmental hostility. Growth also influences firm volatility. The authors also find a strong interaction effect of growth and firm size on firm volatility. The authors conclude that although growth and firm volatility are related concepts, they are different. Originality/value – Growth has concentrated small-firm research during the last 20 years. However, during the last few years, the environment has become very dynamic and small firms need research helping them to deal with such dynamism. There are few studies on firm-level volatility. The research helps understand more the determinants of small-firm volatility.
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Ahmad, Hassan, Nasreen Akhter, Tariq Siddiq, and Zahid Iqbal. "Ownership Structure, Corporate Governance and Capital Structure of Non-Financial Firms of Pakistan." Information Management and Business Review 10, no. 1 (April 10, 2018): 31–46. http://dx.doi.org/10.22610/imbr.v10i1.2146.
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This study is undertaken with the purpose of investigating the impact of ownership structure and corporate governance on the capital structure of Pakistani listed firms from 2011-2014, feasible general least square is used to investigate the impact of ownership structure and corporate governance on capital structure of KSE 100 index firms. Explanatory variables include ownership concentration, managerial ownership, foreign ownership, institutional ownership, board size, board independence and CEO duality along with the three control variables namely firm size, firm profitability and liquidity. There is insignificant positive relationship between ownership concentration and capital structure, managerial ownership has a significant negative impact on debt ratio. Foreign ownership has also a significant negative impact on firm capital structure and institutional ownership has significant positive impact on capital structure. Board size is positively related to capital structure, board independence also positively related to firm’s debt ratio but CEO duality negatively related to the dependent variable, all these variables have significant impact on capital structure of Pakistani firms.
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Makoni, Patricia Lindelwa, and Lindiwe Ngcobo. "Finance and firm characteristics in Zimbabwe." Corporate Ownership and Control 11, no. 2 (2014): 465–72. http://dx.doi.org/10.22495/cocv11i2c5p3.
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The purpose of this study was to examine the impact of firm-specific characteristics on the accessibility of firm financing in Zimbabwe using 2011 data from World Bank enterprise surveys. The results of the study show that firm characteristics in Zimbabwe determine the type of financing that is used for investment and working capital purposes. Small firms seem to rely more on internal financing as opposed to using bank funds, probably due to their small operations and lack of assets to put up as collateral. The larger firms however find it easier to access bank finance as they are much older in terms of age, have developed good relations with their financial services’ providers and are also able to provide the required collateral to back their lines of credit. Both domestic and foreign-owned firms highlighted financial constraints as a major obstacle to their businesses. However foreign firms seemed to access bank loans easier than domestic firms. Also, gender seems to play a minor role in the financing decisions of the firm. It is therefore recommended that the Government engages the financial market intermediaries to find feasible business financing solutions for all sized firms, especially those owned by locals. This would lead to the much-needed economic growth through investment attraction and employment creation.
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Schepker, Donald J., Won-Yong Oh, and Pankaj C. Patel. "Interpreting Equivocal Signals: Market Reaction to Specific-Purpose Poison Pill Adoption." Journal of Management 44, no. 5 (March 18, 2016): 1953–79. http://dx.doi.org/10.1177/0149206316635250.
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Signaling theory suggests that firms send signals to stakeholders to reduce information asymmetry. Research, however, has rarely examined how investors interpret signals that are equivocal. We suggest that sensemaking serves as an important process by which investors interpret firm signals, and salient contextual cues influence the sensemaking process. We examine an equivocal signal, the adoption of a poison pill, as a means of examining investor interpretation of the signal and the role of contextual cues in influencing interpretation. Using a sample of 578 poison pill adoptions and controlling for self-selection, we find that investors react negatively to poison pills adopted to protect net operating losses (NOL poison pills) but positively to poison pills adopted when the firm is in receipt of a takeover offer (in-play poison pills). Assessing the role of contextual cues, our results suggest that CEO duality, the proportion of inside directors on the firm’s board, the firm’s R&D investments, and industry concentration also condition investor response to specific-purpose poison pill adoption. Our study contributes to research on signaling theory, sensemaking, and corporate governance by examining how investors interpret a firm’s equivocal governance decisions.
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Corvino, Antonio, Francesco Caputo, Marco Pironti, Federica Doni, and Silvio Bianchi Martini. "The moderating effect of firm size on relational capital and firm performance." Journal of Intellectual Capital 20, no. 4 (October 11, 2019): 510–32. http://dx.doi.org/10.1108/jic-03-2019-0044.
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Purpose The purpose of this paper is to contribute to the ongoing debate regarding the relationship between relational capital (RC) and firm performance, by investigating the moderation effect of firm size and its key role in defining conditions for competitive advantage. Design/methodology/approach The paper uses the interpretative lens of the resource dependence theory, and refreshes consolidated studies rooted in RC. It identifies a set of variables to measure the influence of RC on firm performance, including the cost of goods sold, interest expenses and earnings per share. Content analysis was used to capture specific features of corporate disclosure tools using 51 items pertinent to RC. The authors used a specific disclosure index drawing on data collected from 73 listed firms in France, Germany, Italy and the UK. Data covering the period from 2011 to 2013 were analyzed using six regression models. Findings Firm size has a moderating effect on the relationship between RC and some variables linked to firm performance. Originality/value The study combines an internal and external perspective to investigate the interplay between firms and market environments, and therefore, enriches the ongoing debate concerning the relationship between RC and firm performance. It outlines possible ways through which RC can become an effective source of competitive advantage.
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Saini, Jagjit S., Onur Arugaslan, and James DeMello. "What values more? Agency costs or accrual quality." Journal of Financial Reporting and Accounting 15, no. 1 (April 10, 2017): 22–38. http://dx.doi.org/10.1108/jfra-10-2015-0088.
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Purpose The purpose of this paper is to examine what is weighted more by the investors when valuing a dual-class firm’s stock – greater agency costs or better accrual quality of the dual-class firm in contrast to the single-class firm. Design/methodology/approach Using the financial data of firms issuing multiple classes of stock (hereafter dual-class firms) and firms issuing single class of stock (hereafter single-class firms), the authors measure the effect of firm’s ownership structure (dual class versus single class) on the earnings response coefficients (ERCs) of prior, current and future period earnings. Findings The authors find that investors care more about agency costs than the quality of accruals in evaluating the earnings of dual-class firms. Specifically, the authors find that current annual returns of the firm are negatively associated with dual-class ownership structure and that earnings informativeness and predictability are decreasing in dual-class ownership of the firm as reflected in decreasing ERCs. Originality/value This study adds to prior literature on dual-class ownership which reports greater agency costs and better accrual quality at dual-class firms in contrast to single-class firms. This study contributes to the literature on earnings informativeness and predictability by evaluating the effect of ownership structure on the ERCs of the firm. Investors should be careful when valuing a dual-class firm and should consider agency costs in addition to accrual quality of reported earnings at such firms.
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An, Young Hoon, Soonkyoo Choe, and Jihoon Kang. "Ways to win: strategic choices, institutions and performance in sub-Saharan Africa." Multinational Business Review 29, no. 3 (March 1, 2021): 374–96. http://dx.doi.org/10.1108/mbr-05-2020-0105.
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Purpose The purpose of this study is to analyse the effects of market-based and nonmarket-based strategies on firm performance in African countries. This study also investigates host country institutions' effect on the relationship between firm strategies and performance in these countries. Design/methodology/approach Data of 1,276 firms in five African countries were obtained from two different sources: The World Bank Enterprise Database and The Global Competitiveness Report. Two-stage least squares regression was applied. Findings Both market-based strategies and corporate political activity (CPA)improve firm performance in the African countries included in the analysis. Institutional development also has a direct positive impact on firm performance. However, the effect of CPA weakens as the host country shifts towards more efficient, market-oriented institutions. Furthermore, the results show that local African firms benefit more from institutional development than foreign firms. Originality/value The paper confirms and extends our understanding of the dynamic fit between institutions and strategy by highlighting the moderating role of institutional development on CPA and market-based strategies in enhancing firm performance.
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Alhashel, Bader. "Capital structure of firms when taxes are removed." Journal of Economic and Administrative Sciences 31, no. 1 (May 18, 2015): 51–63. http://dx.doi.org/10.1108/jeas-10-2013-0040.
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Purpose – The purpose of this paper is to further the understanding of the non-tax benefits of debt. Design/methodology/approach – This paper analyzes the capital structure of firms when taxes are removed by analyzing firms in an emerging market, Kuwait, where personal and corporate taxation does not exist. Findings – The leverage of firms in markets with no taxes are affected by the same leverage factors that affect firms where taxes are present. Non-tax benefits are economically significant and are almost 16 percent of firm value for the average leveraged firm. Practical implications – Given such a finding and the positive effect of debt on firm value, there should be policies to facilitate bank lending and more efficient access to credit for firms. Originality/value – The paper provides an estimate of the size of the non-tax benefits of debt.
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Li, Hongyu, Junjie Wu, and Zhiqiang Lu. "Bank diversity and SME innovation: evidence from China." International Journal of Bank Marketing 38, no. 2 (October 21, 2019): 265–82. http://dx.doi.org/10.1108/ijbm-06-2019-0216.
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Purpose The purpose of this paper is to examine the relationship between bank diversity and small- and medium-sized enterprise (SME) firm innovation in China to evaluate the impact of recent bank deregulation. Design/methodology/approach Using a large data set that includes 8,143 firm-year observations of 1,122 listed SME firms in China and baseline and robustness regression analyses, the authors identify how bank diversity affects firm innovation and via what economic mechanisms. Potential endogeneity problems are considered and addressed in the design and analysis to minimize research bias. Findings The authors find robust evidence that bank diversity improves firm innovation. Specifically, the findings suggest that the positive effects of bank diversity on firm innovation are only significant for the firms which are more external finance dependent, have fewer growth opportunities and/or located in the provinces having low financial market development. Originality/value This study provides novel evidence and insights into the relationship between banking market structure and the determinants of firm innovation in the Chinese context, as a result of China’s banking deregulation.
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Badrul Muttakin, Mohammad, Arifur Khan, and Nava Subramaniam. "Family firms, family generation and performance: evidence from an emerging economy." Journal of Accounting in Emerging Economies 4, no. 2 (July 1, 2014): 197–219. http://dx.doi.org/10.1108/jaee-02-2012-0010.
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Purpose – The purpose of this paper is to examine the impact of family ownership on firm performance. In particular the authors investigate whether family firms outperform non-family firms and whether first generation family firms perform better than second generation family firms in an emerging economy using Bangladesh as a case. Design/methodology/approach – This study uses a data set of 141 listed Bangladeshi non-financial companies for the period 2005-2009. The methodology is based on multivariate regression analysis. Findings – The result shows that family firms perform better than their non-family counterparts. The authors also find that family ownership has a positive impact on firm performance. The analysis further reveals intergenerational differences where family firms and performance are associated positively only when founder members act as CEOs or chairmen. However, when descendents serve as CEOs or chairmen family firms are associated with poorer firm performance. Originality/value – The authors extend the findings of previous studies that investigate the family ownership and firm performance relationship in developed economy settings, but neglected emerging economies. The study also informs the literature about the intergenerational impact of family firms on performance in an emerging market.
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Breslin, Jas. "A Hire Purpose: Skills for Interviewers." Legal Information Management 22, no. 1 (March 2022): 41–44. http://dx.doi.org/10.1017/s147266962200007x.
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AbstractThere is plenty of advice for those about to take an interview for a job, but what about if you're sitting on the other side of the table? Here Jas Breslin, Research & Information Services Manager at top city law firm Charles Russell Speechlys, guides us though the key things to keep in mind when you're the one asking the questions.
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Khan, Imran, Ihsanullah, and Nazish Iftikhar. "Factors affecting corporate liquidity: evidence from pakistani firms." Journal of Management and Science 6, no. 1 (June 30, 2017): 34–43. http://dx.doi.org/10.26524/jms.2016.5.
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The purpose of this study is to discover those factors which effect liquidity level. Data of 59 nonfinancial firm has been collected for this purpose for the period 2006-2013. Results show that significant variables are networking capital, short term debt, firm size, dividend and investment, while leverage, sales growth, and ROA are insignificant variables. Leverage, sales growth and investment have negative relationship with liquidity, while networking capital, short term debt, ROA, firm size and dividend have positive impact on dependent variable. Therefore results explore that different factors like networking capital, short term debt, firm size, dividend and investment play essential role in determining the level of firms’ cash holdings.
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Cater, John James, Marilyn Young, and Keanon Alderson. "Contributions and constraints to continuity in Mexican-American family firms." Journal of Family Business Management 9, no. 2 (May 31, 2019): 175–200. http://dx.doi.org/10.1108/jfbm-08-2018-0022.
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Purpose The purpose of this paper is to investigate the contributions of both successors and incumbent leaders to family firm continuity, using insights from the family business succession literature and cultural dimensions theory. Design/methodology/approach In a qualitative study, the succession practices of 19 Mexican-American family firms were examined. Findings The findings are encapsulated by seven propositions and a model of Mexican-American family firm generational contributions and constraints to family business continuity. Originality/value In-depth interviews with immigrant and second generation family firm leaders revealed both traditional family firm succession patterns and atypical succession patterns, including generational inversion and equals across generations.
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Sun, Jerry, George Lan, and Zhenzhong Ma. "Investment opportunity set, board independence, and firm performance." Managerial Finance 40, no. 5 (May 6, 2014): 454–68. http://dx.doi.org/10.1108/mf-05-2013-0123.
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Purpose – The purpose of this paper is to investigate the impact of Sarbanes-Oxley Act (SOX) on high growth firms’ corporate governance. Specially, the study examines whether there is a negative impact of SOX on the interactive effect of board independence and investment opportunity set on firm performance. Design/methodology/approach – Sample firms were selected from the Investor Responsibility Research Center Directors’ database. Both accounting- and market-based firm performance measures are used. Regressions are run to test the hypothesis. Findings – It was found that the impact of SOX on the interaction effect of board independence and investment opportunity set on firm performance is negative. Originality/value – The results suggest that the impact of SOX in corporate governance and regulatory environment mitigates the effect of board independence on the relationship between investment opportunity set and firm performance, consistent with the notion that the enactment of SOX increases monitoring costs of board governance especially for high-growth firms.
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Janardhanan, Anju Kalluvelil, and Uma Vakadae Ramkumar. "Does internal control process and firm characteristics improve firm value? An empirical analysis in the manufacturing sector." Corporate Ownership and Control 19, no. 3 (2022): 101–11. http://dx.doi.org/10.22495/cocv19i3art7.
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The purpose of this research is to investigate the role of enterprise risk management (ERM), Big4 auditors and firm characteristics on firm value. This population study was conducted in the Indian manufacturing sector. Annual panel data for 11 years (2007–2017) was collected from 60 firms on the National Stock Exchange (NSE). Empirical findings prove that there is variation in Tobin’s Q but no difference in return on assets (ROA) and return on equity (ROE) among firms that have implemented ERM and included Big4 audit firms. The study documents that Q was influenced by the implementation of ERM, liquidity, firm age and firm size. Findings reveal that ERM, firm size, leverage, firm age, liquidity and firm complexity impacted ROA. The study outcome also shows ROE was affected by leverage, firm size, liquidity and firm complexity. This study is a valuable addition to the existing studies on the Indian manufacturing sector and has contributed incredible insights to the empirical literature on firm value from the multidimensional outlook of the purchasers, management, and investors. The findings have several implications for investors, managers and researchers.
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Looser, Stéphanie, and Walter Wehrmeyer. "Ethics of the firm, for the firm or in the firm? Purpose of extrinsic and intrinsic CSR in Switzerland." Social Responsibility Journal 12, no. 3 (August 1, 2016): 545–70. http://dx.doi.org/10.1108/srj-07-2015-0097.
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Purpose Despite the increased recognition and emphasis on corporate social responsibility (CSR) as a topic and highly formalised CSR control systems, numerous well-publicised problems and scandals often involving multinational enterprises (MNEs) continue to emerge. These companies are mostly extrinsically motivated in CSR. They operate with highly formalised CSR systems that, in many cases, miss the prevention of anti-social and illegal behaviour. This might reflect the failure of extrinsic CSR to integrate the ethical dimension and/or the failure of intrinsic CSR to formalise and thus benefit from economies of scale. Currently, the conviction is growing that if CSR is to have a meaningful impact, it should be a matter of intrinsic motives, morale and ethical values rather than a formalised management tool. This research aims to focus on a sample of small and large companies in Switzerland, aiming at a comparison of key motives for CSR related to actual CSR implementation, performance and company size. Design/methodology/approach The study examined two groups: seven owner-managers of small- and medium-sized enterprises (SMEs) and seven managers of MNEs. Each group met for two focus group discussions that were qualitatively and visually analysed using MAXQDA. Findings The results show that CSR implementation in the examined Swiss SMEs is more related to moral commitment than to profit maximisation. These companies are often driven by soft assets, such as networks, by the nexus of mission and value set; by a system of initiatives and integrated behaviour; by proximity and informal, flat organisational structures; by the aspiration and ambition of craftsmanship or excellent service (instead of profit); by community involvement; by recruiting from the local community; by the willingness to grow slowly and steadily; by the avoidance of atomic markets; and finally, by the mental set up and sociological tradition of the stewardship concept. This contrasts with the extrinsically motivated approach of the MNEs under research. While MNEs follow their approach of “ethics for the firm that must pay”, the findings here identified potential transition cases of “ethics in the firm” and “ethics of the firm” within Swiss SMEs. This is consistent with others, resembling the need of this dichotomy to be revised. Research limitations/implications The cross-sectorial approach limits the degree to which motives can clearly be attributed to actual CSR performance or company size. Practical implications The results imply that policymakers, public institutions, scientific community, etc. should be careful when establishing systems that favour financial returns from CSR engagement, because, first, other research showed that a behaviour attributed to extrinsic motives is mostly perceived as dishonest and misleading, for instance, consumers. Second, extrinsic motivation might crowd out morale and paying lead actors for behaving altruistically or philanthropically might decline their intrinsic motivation. Notably, the crowding out of intrinsic motivation by extrinsic incentives is a phenomenon well-researched not only in regard to CSR but in various other areas linked to human behaviour. This has important implications for nearly every business operation, especially for mergers and acquisitions, as well as for the growth of businesses. Social implications It seems unsuitable to support social goods in intrinsic CSR by the implementation of a system of financial incentives (or consequences). Thus, an economic cost-benefit is inappropriate where CSR needs an ethical stand. The difference between extrinsic and intrinsic CSR is very difficult to bridge – both have powerful incentives and drivers preventing a potential cross-over. Originality/value In sum, this study showed that CSR is meaningful and justifiable even if it is not profitable in the first place or implemented in and managed through formalised systems. This leads to two conclusions: first, care should be taken when emphasising the extrinsic approach in relation to social goods and second, the cost of a possible mismatch in a climate of ethical principles might be substantial for societies’ moral inclination.
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Saksonova, Svetlana, and Svetlana Savina. "Financial Management as a Tool for Achieving Stable Firm Growth." Economics and Business 29, no. 1 (August 1, 2016): 49–55. http://dx.doi.org/10.1515/eb-2016-0021.
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Abstract The purpose of this study is to show that financial management in the firm is a tool for achieving stable firm growth and long-term firm stability while problems in firm financial management lead to the inability of firms to ensure sustainable growth of their value. This problem is relevant for firms in all countries. The main objectives of this paper are: to analyse dynamics of value of the largest Latvian firms, to determine the drivers of these dynamics and to establish the main problems slowing the growth of firm value, which are related to the drawbacks in financial management, and to provide suggestions for solving these problems. This study analyses financial management processes and identifies several key problems in financial management.
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Kamasa, Kofi, George Adu, and Eric Fosu Oteng-Abayie. "Firm productivity in Sub-Saharan Africa: how relevant is quality of tax administration?" African Journal of Economic and Management Studies 11, no. 1 (November 14, 2019): 75–90. http://dx.doi.org/10.1108/ajems-03-2019-0093.
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Purpose The purpose of this paper is to find the effect of quality of tax administration on firm productivity in Sub-Saharan Africa (SSA). Also, the paper investigates whether the effect of quality of tax administration on firm productivity varies with respect to firms of different ages and sizes. Design/methodology/approach The paper uses the World Bank Enterprise Survey data for 6,718 firms across 40 countries in SSA. By employing the least square method, the estimations are robust since country and industry heterogeneity are controlled, as well as other covariates that affect firm productivity such as capital, technology, business environment, infrastructure and firm characteristics. Findings Results of the paper reveal that productivity of firms reduces with poor quality of tax administration. With positive and significant interaction term coefficient between smaller firms and quality of tax administration, the findings also reveal that smaller firms do benefit in the presence of poor quality of tax administration than larger firms. Originality/value The study contributes to policy by providing empirical evidence on the impact that quality of tax administration has on firm productivity. Empirically, the paper is also the first to assess the effect of tax administration quality on firm productivity with sole emphasis on SSA (to the best of the authors’ knowledge after review of literature). The paper suggests reforms and improvement in tax administration so as to reduce compliance burden and improve productivity.
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Smith, Garrett C. C., and Jeffrey M. Coy. "Corporate diversification." Review of Accounting and Finance 17, no. 3 (August 13, 2018): 405–24. http://dx.doi.org/10.1108/raf-11-2016-0172.
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Purpose The purpose of this study is to compare two theories that relate the proportion of diversified firms in the economy and the implied discount for diversified firms: the first is a real-options model predicting a positive relationship between the discount and management’s choice to operate a diversified firm; the second is based on catering theory, in which a negative relationship is predicted, as management is attentive to investor preference concerning diversified firms. Design/methodology/approach This study proposes a new aggregate measure of the diversification discount. The authors’ measure allows for decomposition of the discount into firm-level mispricing, industry-level mispricing and long-run fundamental value components. Findings Results support a catering theory of diversification. The discount appears to be the result of firm-level mispricing. Thus, providing an explanation for why, in light of the observed discount, a large number of diversified firms persist. Originality/value To the authors’ knowledge, this is the first study to provide evidence that firm-level mispricing may drive the observed diversification discount.
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Wahono, Ellen Monata, and Shinta Permata Sari. "INTENSITAS RESEARCH AND DEVELOPMENT, GOODWILL, INTELLECTUAL CAPITAL DAN PERFORMA FINANSIAL SEBAGAI PENENTU NILAI PERUSAHAAN." Duconomics Sci-meet (Education & Economics Science Meet) 1 (July 27, 2021): 296–306. http://dx.doi.org/10.37010/duconomics.v1.5456.
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The increasingly fierce competition that occurs between companies in the current era of globalization is forcing the company to improve its strategies. Therefore, the main purpose of establishing a company is to increase the value of the firm. To achieve that purpose,managers have to understand the factors that can increase the value of the firms and also fulfillthe interests of stakeholders. This study aims to analyze the effect of Research and Development Intensity (RnD), Goodwill (GDW), Intellectual Capital (IC), and Financial Performance (PF) on Firm Value. The research data is obtained from the annual reports of manufacturing companies listed on the Indonesia Stock Exchange in 2015-2019 with a total sample of 60 after meeting certain criteria. The data is analyzed using multiple linear regression analysis.The results show that goodwill, intellectual capital, and financial performance have an effect on firm value. Meanwhile, the intensity of research and development has no effect on firm value The increasingly fierce competition that occurs between companies in the current era of globalization is forcing the company to improve its strategies. Therefore, the main purpose of establishing a company is to increase the value of the firm. To achieve that purpose,managers have to understand the factors that can increase the value of the firms and also fulfillthe interests of stakeholders. This study aims to analyze the effect of Research and Development Intensity (RnD), Goodwill (GDW), Intellectual Capital (IC), and Financial Performance (PF) on Firm Value. The research data is obtained from the annual reports of manufacturing companies listed on the Indonesia Stock Exchange in 2015-2019 with a total sample of 60 after meeting certain criteria. The data is analyzed using multiple linear regression analysis.The results show that goodwill, intellectual capital, and financial performance have an effect on firm value. Meanwhile, the intensity of research and development has no effect on firm value
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Egbunike, Chinedu Francis, and Chinedu Uchenna Okerekeoti. "Macroeconomic factors, firm characteristics and financial performance." Asian Journal of Accounting Research 3, no. 2 (October 8, 2018): 142–68. http://dx.doi.org/10.1108/ajar-09-2018-0029.
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Purpose The purpose of this paper is to explore the interrelationship between macroeconomic factors, firm characteristics and financial performance of quoted manufacturing firms in Nigeria. Specifically, the study investigates the effect of interest rate, inflation rate, exchange rate and the gross domestic product (GDP) growth rate, while the firm characteristics were size, leverage and liquidity. The dependent variable financial performance is measured as return on assets (ROA). Design/methodology/approach The study used the ex post facto research design. The population comprised all quoted manufacturing firms on the Nigerian Stock Exchange. The sample was restricted to companies in the consumer goods sector, selected using non-probability sampling method. The study used multiple linear regression as the method of validating the hypotheses. Findings The study finds no significant effect for interest rate and exchange rate, but a significant effect for inflation rate and GDP growth rate on ROA. Second, the firm characteristics showed that firm size, leverage and liquidity were significant. Practical implications The study has implications for regulators and policy makers in formulating policy decisions. In addition, managers may better understand the interplay between macroeconomic factors, firm characteristics and profitability of firms. Originality/value Few studies have addressed the interplay of macroeconomic factors and firm characteristics in determining the profitability of manufacturing firms in the country and developing countries in general.
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Baert, Stijn, Ann-Sofie De Meyer, Yentl Moerman, and Eddy Omey. "Does size matter? Hiring discrimination and firm size." International Journal of Manpower 39, no. 4 (July 2, 2018): 550–66. http://dx.doi.org/10.1108/ijm-09-2017-0239.
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Purpose The purpose of this paper is to study the association between firm size and hiring discrimination against women, ethnic minorities and older job candidates. Design/methodology/approach The authors merge field experimental measures on unequal treatment with firm-level data. The resulting data enable the authors to assess whether discrimination varies by indicators of firm size, keeping other firm characteristics constant. Findings In contrast with the theoretical expectations, the authors find no evidence for an association between firm size and hiring discrimination. On the other hand, the authors do find suggestive evidence for hiring discrimination being lower in respect of public or non-profit firms (compared to commercial firms). Social implications To effectively combat hiring discrimination, one needs to understand its driving factors. In other words, to design adequate policy actions, targeted to the right employers in the right way, one has to gain insight into when individuals are discriminated in particular, i.e. into the moderators of labour market discrimination. In this study, the authors focus on firm size as a moderator of hiring discrimination. Originality/value Former contributions investigated this association within the context of ethnic discrimination only and included hardly any controls for other firm-level drivers of discrimination. The authors are the first to study the heterogeneity in discrimination by firm size with respect to multiple discrimination grounds and control for additional firm characteristics.
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Xu, Yejun, D. Enrique Ribeiro-Soriano, and J. Gonzalez-Garcia. "Crowdsourcing, innovation and firm performance." Management Decision 53, no. 6 (July 13, 2015): 1158–69. http://dx.doi.org/10.1108/md-06-2014-0408.
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Purpose – The purpose of this paper is to identify whether firms that correctly use crowdfunding tools perform significantly better than firms that do not. For that purpose the authors develop a model that relates crowdfunding, innovation distinctive competences and its potential to create value in the firm. The authors want to know if crowdsourcing has more impact on Schumpeterian distinctive competences or continuous distinctive competences. Another aim is to create a new scale to measure the degree of crowdsourcing introduction in a firm. Design/methodology/approach – Within the knowledge intensive industries, the universe selected was the Chinese population of biotechnology and telecommunications industries. The information on the three variables was collected in a primary study, carried out by mail questionnaire. The questionnaire respondent was the manager of the firm. The measuring instrument was pre-tested in 30 firms, 15 from the biotechnology and 15 from the telecommunications industries. The fieldwork was undertaken between January and May 2013. The questionnaire was sent to all the firms making up the population. The sample finally included 393 firms (201 from the biotechnology industry and 192 from the telecommunications industry). Findings – Although the potential of crowdsourcing systems and its indirect relationship with firm performance is complex, the authors have showed that those firms who use these technologies to capture the knowledge of the customers and transform it in innovation competences can obtain a better performance. This result has important managerial implications. Biotechnology and telecommunications companies should use information systems in an efficient way to immediately satisfy constantly changeable customer desires and needs, since firms that are not able to generate this added value across their information and technology systems, risk being relegated to price competition. Firm information systems should be used strategically to develop a deep understanding of preferences and behaviors of its customers in order to foster loyalty and retention. One way to improve innovation competences in a firm is to introduce information technology applications oriented to capture the needs of the customers. Originality/value – This work is an interesting contribution to the literature in that it exacts a knowledge of the causal relationship between crowdsourcing and innovation. The implantation of crowdsourcing techniques is not able to directly improve firm performance, but it exerts an indirect influence by developing innovation distinctive competences. A firm will successfully introduce crowdsourcing if it is able to imbue their principles and practices with processes, routines and individuals, in order to increase its organizational memory and its ability to improve or create new products. The authors have created a new scale to measure the degree of crowdsourcing introduction in a firm. It meets all the sociometric properties required to social sciences.
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Ben Rejeb Attia, Mouna, Naima Lassoued, and Mohamed Chouikha. "State ownership and firm profitability in emerging markets." International Journal of Public Sector Management 31, no. 2 (March 5, 2018): 167–83. http://dx.doi.org/10.1108/ijpsm-09-2016-0155.
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Purpose The purpose of this paper is to examine the relationship between state ownership and firm profitability in developing countries by considering the endogenous nature of state ownership and firm profitability. Design/methodology/approach A simultaneous equation analysis is applied to study 232 Tunisian firms over the 2001-2013 period. This analysis is compared with OLS estimates to show its power in terms of an endogenous setting and its potential to improve estimation. Findings Unlike the OLS estimates that show a non-significant relationship between state ownership and firm profitability, the simultaneous equation analysis reveals a non-symmetrical concave relationship. Specifically, state ownership affects positively firm profitability when it is relatively small and negatively when state ownership dominates. Specification test indicates that both state ownership and firm profitability are endogenous. Furthermore, the simultaneous model’s explanatory power exceeds that of OLS estimates and proves to be a suitable estimation technique. Practical implications Taking into account public firms’ categorization, the authors implicitly examine the effect of privatization and corporatization on firm profitability. The findings imply that privatization is not the only solution to the operational problems of public firms, but an internal governance system restructuring can also be favorable for these firms. Originality/value In addition to focusing on a new database of developing countries, the case of Tunisian firms, the main empirical analysis is conducted by considering the endogeneity issue. Thus, the findings improve understanding of the role played by state ownership and suggest that a partial state control appears to be beneficial to firm profitability.
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Mouselli, Sulaiman, and Khaled Hussainey. "Corporate governance, analyst following and firm value." Corporate Governance 14, no. 4 (July 29, 2014): 453–66. http://dx.doi.org/10.1108/cg-03-2011-0093.
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Purpose – The purpose of this paper is to examine the impact of a firm’s corporate governance (CG) mechanisms on the number of financial analysts following UK firms. The potential effect of the number of analysts following firms in the UK on the association between CG mechanisms and firm value was also examined. Design/methodology/approach – Multiple regression models were used to examine the association between CG, analyst coverage and firm value for a large sample of UK firms listed in London Stock Exchange with financial year ends between January 2003 and December 2008. Findings – It was found that the aggregate level of CG quality is positively associated with the number of analysts following UK firms. In addition, the compensation score is the main component that affects the number of analysts following UK firms. The results suggest that financial analysts are particularly concerned with how much compensation executives and directors receive. This is consistent with Jensen and Meckling (1976) who argue that chief executive officer (CEO) compensation can be used as effective mechanisms for mitigating agency costs. Hence, higher levels of CEO compensation attract more financial analysts to follow the firm. Surprisingly, when the joint effect of both CG quality and the number of analysts following on firm value was examined, no significant effect was found for both variables on firm value. Originality/value – This paper contributes to prior research by providing the first empirical evidence on the impact of disaggregated levels of CG on analyst following and firm value for a large sample of UK firms.
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Jiang, Yusi, and Yapu Zhao. "Financial fraud contagion through board interlocks: the contingency of status." Management Decision 58, no. 2 (December 9, 2019): 280–94. http://dx.doi.org/10.1108/md-12-2018-1355.
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Purpose The purpose of this paper is to explore the implications of the relative status between two interlocking firms for financial fraud or non-fraud contagion through interlock ties. Design/methodology/approach This study uses a sample of publicly listed firms in China over a ten-year period from 2005 to 2014. Data are collected from the China Stock Market and Accounting Research Database. Findings This study finds that non-fraud behaviors of lower-status partners inhibit fraud behaviors of the focal firm, whereas their fraud behaviors have no effect on the focal firm. In contrast, fraud behaviors of higher-status partners facilitate fraud behaviors of the focal firm, whereas their non-fraud behaviors have no effect on the focal firm. Originality/value This study provides new insights to the misconduct contagion literature by considering firms’ status differential as an important factor that governs the contagion process of fraud or non-fraud behaviors in board interlocks. It combines role theory and the contagion literature by studying the influence of the match between the status-based role expectations and practices of interlocking firm on the focal firm’s decision to engage in the same type of practice.
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Jang, Soojeen Sarah, Hyesoo Ko, Yanghon Chung, and Chungwon Woo. "CSR, social ties and firm performance." Corporate Governance: The International Journal of Business in Society 19, no. 6 (December 2, 2019): 1310–23. http://dx.doi.org/10.1108/cg-02-2019-0068.
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Purpose This paper aims to explore the effect of social ties on the relationship between corporate social responsibility (CSR) and firm performance in Korea. Design/methodology/approach Social ties were measured from firm disclosures of 318 Korean firms from 2012 to 2015. Propensity score matching and regression analysis were used to investigate the moderating effects of social ties on the relationship between CSR and firm performance. Findings The result shows that social ties have more negative moderating effects on the relationship between CSR and firm performance in Chaebol firms than in non-Chaebol firms. Practical implications Firms need to enhance the monitoring of social ties within board members to assure the proper oversight of CSR. Originality/value This paper contributes to the CSR literature by providing empirical evidence of the negative aspects of social ties on the relationship between CSR and firm performance in Korea.
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Goldar, Bishwanath, Isha Chawla, and Smruti Ranjan Behera. "Trade liberalization and productivity of Indian manufacturing firms." Indian Growth and Development Review 13, no. 1 (June 12, 2019): 73–98. http://dx.doi.org/10.1108/igdr-10-2018-0108.
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Purpose The purpose of this paper is to assess the impact of India’s trade liberalization during the late 1990s and 2000s on productivity of manufacturing firms and verify whether the productivity-enhancing impact of reductions in input tariffs was greater than that of output tariff cuts, as found in some earlier studies. Design/methodology/approach Firm-level (company-level) data drawn from Prowess database are used for the estimation of total factor productivity (TFP) at the firm level, done by using the Levinsohn–Petrin methodology. Econometric models are estimated to explain firm-level TFP. The explanatory variables used are output and input tariff rates and quantitative restrictions on imports at the industry level and firm characteristics such as firm size, export intensity and import intensity. Firm-level panel data for 2002-2010 or for a longer period 1998-2010 are used for the estimation of econometric models. Model estimation is done by applying the fixed-effects model and IV-2SLS, 3SLS estimators and EC2SLS estimators. Findings Trade liberalization had a significant positive effect on the productivity of Indian manufacturing firms. The lowering of output tariff had a greater beneficial impact on TFP of Indian manufacturing firms than the lowering of tariff on intermediate inputs. Originality/value Good deal of care has been taken in the measurement of output and inputs for the purpose of TFP measurement. Two alternative frameworks, gross output and value added, are used. This helps in making a better estimate of the impact of trade liberalization on TFP.
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Chang, Heng-Yu, and Chun-Ai Ma. "Financial flexibility, managerial efficiency and firm life cycle on firm performance." Journal of Advances in Management Research 16, no. 2 (April 23, 2019): 168–80. http://dx.doi.org/10.1108/jamr-06-2017-0072.
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Purpose As the capital market in China is still developing, several constraints on a Chinese-listed firm’s financing strategy have a direct impact on its financial flexibility. The purpose of this paper is to reconstruct traditional financial flexibility index (FFI) derived from the western context, provide empirical evidence within eastern context by modified FFI and examine how the managerial efficiency of Chinese-listed firms is demonstrated with modified FFI to escort corporate life cycle hypothesis. Design/methodology/approach By tailored FFI to fit the contemporary operations of Chinese-listed firms, this study investigates how managerial efficiency varies across different life stages to demonstrate the moderating power in the firm performance of financially flexible firm. Findings It is found that financially flexible firms in the Chinese stock market generally experience good firm performance, yet the managerial efficiency could gradually be diminishing at their mature stage even firms’ financial flexibility remains consistent with the agency theory. This paper sheds light on the necessity to reexamine the components in financial flexibility based on the eastern context, and provides avenue to further understand the managerial behavior of Chinese listed firms when considering firm life cycles. Research limitations/implications Although it is difficult for this current study to offer the precise weights on each factor in calculating financial flexibility, the judgment matrix method is adopted to at least provide reliable estimates in accordance with Chinese business contexts with less than 10 percent errors in contrast to the actual weights. Practical implications This modified FFI is particularly suitable for Chinese-listed firms under certain unique financial reporting regulations by adjusting a number of weights and factors. This study may help practitioners understand the managerial conduct of publicly listed firms in China. Originality/value The paper constructs a modified FFI with Chinese stock market characteristics embedded, and provides insightful evidence to explain the new pecking order theory by considering the life cycle stage of Chinese-listed companies.
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Kim, Hyun-ui, and Ow-won Park. "A Study on the Process of Non-regular Workers’ Utilization on Firm Performance: The Mediating Effect of Employee Competence." Institute of Management and Economy Research 13, no. 2 (June 30, 2022): 95–106. http://dx.doi.org/10.32599/apjb.13.2.202206.95.
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Purpose - The purpose of this study was to examine the mediating effect of employee competence on the relationship between the utilization of non-regular workers and firm performance. Design/methodology/approach - This study utilized 427 firm level data from HCCP. The Exploratory Factor Analysis (EFA) and the multiple regression analysis were conducted to verify the hypotheses. Findings - We found that the utilization of non-regular workers is not significantly related to firm performance. However, the utilization of non-regular workers had a negative relationship with employee competence, and that employee competence mediated the relationship between the utilization of non-regular workers and firm performance. Research implications or Originality - As environmental uncertainty and competition between firms intensify, more and more firms are utilizing non-regular workers. Research on the relationship between the utilization of non-regular workers and firm performance is continuously conducted, but research on the process of explaining the specific relationship between them is still insufficient. Our study contributes the related research area by identifying the mediating role of employee competence on the utilization of non-regular workers and firm performance relationship.
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Megaravalli, Amith Vikram, and Gabriele Sampagnaro. "Predicting the growth of high-growth SMEs: evidence from family business firms." Journal of Family Business Management 9, no. 1 (March 14, 2019): 98–109. http://dx.doi.org/10.1108/jfbm-09-2017-0029.
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Purpose The purpose of this paper is to arrive at high-growth firm (HGF) and predict the growth of rapid-growth firms using the set of balance-sheet ratios. Design/methodology/approach The source of data came from the AIDA database, a commercial database provided by Bureau van Dijk. A total of 45,000 family business small- and medium-scale enterprises of Italy were selected for the study. Liquidity ratio, solvency ratio, firm age, cash flow, and working capital are considered as predictors of the firm growth. Probit regression is used for predicting the growth of the firms. Findings The result of the study indicated that the most important financial indicators were the liquidity ratio, solvency ratio, firm age, cash flow, and working capital are most important predictors of firm growth. The ROC of the model is 70.78, which shows that the model is fair. Originality/value The present study considers an innovative approach that considers balance sheet issued the year prior to the observation of rapid growth as predictors of firm growth (similar to the credit-scoring models, i.e. the Z-score model, to measure the probability of default).
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Li, Zonghui, and Joshua J. Daspit. "Understanding family firm innovation heterogeneity." Journal of Family Business Management 6, no. 2 (July 11, 2016): 103–21. http://dx.doi.org/10.1108/jfbm-02-2015-0010.
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Purpose – In family business studies, inconsistent findings exist regarding the relationship between family involvement and firm innovation. The purpose of this paper is to understand the heterogeneity of family firm innovation. Design/methodology/approach – The authors draw on governance literature and the socioemotional wealth (SEW) perspective to examine how the extent of family governance and the type of SEW objectives jointly influence innovation strategies in family firms. Findings – The authors develop a typology of family firm innovation strategies, positing that the family firm’s risk orientation, innovation goal, and knowledge diversity vary depending on the degree of family involvement in governance and the type of SEW objective. The authors propose that four family firm innovation strategies (e.g. Limited Innovators, Intended Innovators, Potential Innovators, and Active Innovators) emerge when family involvement in the dominant coalition (high or low) is contrasted with the SEW objective (restricted or extended) pursued by the family. Practical implications – Understanding how governance and SEW goals work together to influence the firm’s innovation strategies is potentially valuable for managers of family firms. The authors offer practical suggestions for how to strategically reposition the firm to pursue innovation strategies more in line with those of the Active Innovator. Originality/value – This study contributes to the family business literature by using a multi-dimensional approach to examine family firm heterogeneity. In addition, by articulating various family firm innovation strategies, the authors offer insight into the previously inconsistent findings concerning firm innovation behavior and outcomes in family business studies.
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Martynov, Aleksey. "Alliance portfolios and firm performance: the moderating role of firms’ strategic positioning." Journal of Strategy and Management 10, no. 2 (May 15, 2017): 206–26. http://dx.doi.org/10.1108/jsma-01-2016-0003.
Full textAbstract:
Purpose The purpose of this paper is to fill the theoretical void in the discussion of effects of alliance portfolios on firm performance by studying the moderating role of a firm’s strategic positioning. Design/methodology/approach A fixed effects, autoregressive panel model on a comprehensive, longitudinal sample of large and medium-sized publicly traded companies in the USA. Findings The effect of alliance portfolios on firm performance is conditional on the firm’s strategic positioning. Research limitations/implications The results may not be applicable to firms outside the USA or small firms. Practical implications Executives should craft their alliance portfolios while considering the strategic positioning of their firms. Originality/value This paper presents the first study of alliance portfolios that uses a comprehensive, multi-industry sample while considering firms’ strategic positioning. The paper is the first to jointly study characteristics of alliance portfolios and firm strategies.