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1
Hassan, Tarek A., Stephan Hollander, Laurence van Lent, and Ahmed Tahoun. "Firm-Level Political Risk: Measurement and Effects*." Quarterly Journal of Economics 134, no. 4 (August 26, 2019): 2135–202. http://dx.doi.org/10.1093/qje/qjz021.
Повний текст джерелаАнотація:
AbstractWe adapt simple tools from computational linguistics to construct a new measure of political risk faced by individual U.S. firms: the share of their quarterly earnings conference calls that they devote to political risks. We validate our measure by showing that it correctly identifies calls containing extensive conversations on risks that are political in nature, that it varies intuitively over time and across sectors, and that it correlates with the firm’s actions and stock market volatility in a manner that is highly indicative of political risk. Firms exposed to political risk retrench hiring and investment and actively lobby and donate to politicians. These results continue to hold after controlling for news about the mean (as opposed to the variance) of political shocks. Interestingly, the vast majority of the variation in our measure is at the firm level rather than at the aggregate or sector level, in the sense that it is captured neither by the interaction of sector and time fixed effects nor by heterogeneous exposure of individual firms to aggregate political risk. The dispersion of this firm-level political risk increases significantly at times with high aggregate political risk. Decomposing our measure of political risk by topic, we find that firms that devote more time to discussing risks associated with a given political topic tend to increase lobbying on that topic, but not on other topics, in the following quarter.
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Aye, Goodness C., Mehmet Balcilar, Riza Demirer, and Rangan Gupta. "Firm-level political risk and asymmetric volatility." Journal of Economic Asymmetries 18 (November 2018): e00110. http://dx.doi.org/10.1016/j.jeca.2018.e00110.
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Gyimah, Daniel, Albert Danso, Emmanuel Adu-Ameyaw, and Agyenim Boateng. "Firm-level political risk and corporate leverage decisions." International Review of Financial Analysis 84 (November 2022): 102354. http://dx.doi.org/10.1016/j.irfa.2022.102354.
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Arel-Bundock, Vincent, Clint Peinhardt, and Amy Pond. "Political Risk Insurance: A New Firm-level Data Set." Journal of Conflict Resolution 64, no. 5 (September 8, 2019): 987–1006. http://dx.doi.org/10.1177/0022002719875754.
Повний текст джерелаАнотація:
When do governments impose costs on foreign firms? Many studies of foreign direct investment focus on incentives for government expropriation, but scholars are often forced to rely on indirect measures of expropriation to conduct empirical analyses. This article introduces a data set which includes information on over 5,000 political risk insurance contracts issued by the US Overseas Private Investment Corporation since 1961, and on all the claims filed by investors under these contracts. These detailed insurance data allow us to study the determinants of foreign investors’ losses from a variety of sources, including expropriation, inconvertibility, and violent conflict. To illustrate the benefits of these data for hypothesis testing, we adopt a comprehensive empirical approach and explore both shared and distinct causes across risk categories.
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Cao, Cathy Xuying, and Chongyang Chen. "Political sentiment and stock crash risk." Journal of Risk Finance 23, no. 2 (February 16, 2022): 139–54. http://dx.doi.org/10.1108/jrf-11-2021-0186.
Повний текст джерелаАнотація:
PurposeThis paper examines the relation between political sentiment and future stock price crash risk.Design/methodology/approachThis study employs firm-level political sentiment from earnings conference calls. The empirical analysis applies panel regressions on 40,254 US firm-year observations between 2002 and 2020, controlling for various firm-specific determinants of crash risk and firm-, industry- as well as time-fixed effects.FindingsThe study identifies a negative association between both the level and the change of political sentiment and stock crash risk. Further analysis shows that the predictive power of political sentiment is independent of either non-political sentiment or political risk and remains consistently strong during periods of either high or low economic policy uncertainty. Moreover, the predictive effect of political sentiment is more pronounced for firms with high litigation risk.Research limitations/implicationsThe evidence highlights the important role of political sentiment in predicting stock crash risk. The results are consistent with the signaling hypothesis that managers tend to use their tone in conference calls to convey informative messages on firm outlooks.Practical implicationsThe study provides a recommendation on risk management: soft information such as political and non-political sentiment in earnings conference calls is useful in managing stock crash risk. The study findings also call for careful consideration of social costs, such as stock crash risk, associated with political policies. Ill-conceived policies may lead to market crashes, which can potentially outweigh the upsides of well-meaning political reforms.Originality/valueTo the authors best knowledge, this is the first study to identify the effect of time-varying firm-level political sentiment conveyed in conference calls on stock price crash.
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Isakin, Maksim, and Xiaoling Pu. "The Impact of Firm-Level Political Risk on Creditor Control." Journal of Fixed Income 29, no. 1 (May 22, 2019): 44–54. http://dx.doi.org/10.3905/jfi.2019.1.070.
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Bano, Saira, Muhammad Asif, and Muhammad Aamir. "EXPLORING THE FIRM LEVEL TRANSPARENCY AND ITS IMPACT ON FIRM VALUE." December 2022 38, no. 04 (December 31, 2022): 437–47. http://dx.doi.org/10.51380/gujr-38-04-05.
Повний текст джерелаАнотація:
Increased transparency encourages management to perform efficiently which leads to increase profitability of Firm. Firms in Pakistan are exposed to political risk but they are adopting strategies for the risk management and performing well. The objective of this study is to examine the relationship between firm level transparency and firm value of non-financial firms in Pakistan. Sixty registered firms in KSE 100 Index of Pakistan were considered for analysis for the period 2014-2018. The researchers had developed an index for measuring the firm’s transparency (disclosure). Regression analysis technique was used to find important relationships between the variables. The results showed higher firm level transparency leads to accelerate firm financial value. The results provide singifcnat information about the issues under study. On the other hand higher level of transparency on firm level decreases firm value in Pakistani market. While inverse relationship was thus found amid political risk, transparency and firm financial value. This study had unveiled fact that mostly Pakistani firms are undervalued, riskier and slow growing which disclose more to combat with negative assessments in market from participants.
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Marhfor, Ahmed, Kais Bouslah, and Abdelmajid Hmaittane. "Does Firm Political Risk Affect the Relationship between Corporate Social Responsibility and Firm Value?" Sustainability 14, no. 18 (September 7, 2022): 11217. http://dx.doi.org/10.3390/su141811217.
Повний текст джерелаАнотація:
This paper investigates whether firm-level (idiosyncratic) political risk (PR) affects the relationship between corporate social responsibility (CSR) and firm value using a sample of 16,518 firm-year observations which correspond to 2055 unique firms belonging to the Russell 3000 Index over the sample period 2010–2020. Our main findings are as follows: First, firm-level PR does not affect firm value. Second, CSR is positively related to firm value, which is mainly driven by the social component of CSR. Finally, PR has no effect on the CSR–firm value relationship, regardless of the PR type. Our evidence suggests that firm-level PR is not priced in the financial market and as such it does not affect the CSR–firm value relationship. This is consistent with portfolio theory which suggests that only systematic risk is priced.
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Harymawan, Lam, Nasih, and Rumayya. "Political Connections and Stock Price Crash Risk: Empirical Evidence from the Fall of Suharto." International Journal of Financial Studies 7, no. 3 (September 11, 2019): 49. http://dx.doi.org/10.3390/ijfs7030049.
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This study examines the relationship between firm-level political connections and stock price crash risk in Indonesia. It employs the difference-in-difference design to deal with the self-selection bias issue regarding the choice of the firms to become a politically connected firm. We use the sudden resignation of the former President of Indonesia, Suharto, to show that politically connected firms are associated with lower stock price crash risk and that the risk for these politically connected firms increased after Suharto resigned. Furthermore, we found evidence that these negative associations are more pronounced in firms with more complex firm structures.
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Vadlamannati, Krishna Chaitanya. "Impact of Political Risk on FDI Revisited—An Aggregate Firm-Level Analysis." International Interactions 38, no. 1 (January 2012): 111–39. http://dx.doi.org/10.1080/03050629.2012.640254.
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Keillor, Bruce D., Timothy J. Wilkinson, and Deborah Owens. "Threats to international operations: dealing with political risk at the firm level." Journal of Business Research 58, no. 5 (May 2005): 629–35. http://dx.doi.org/10.1016/j.jbusres.2003.08.006.
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Laufs, Katharina, Michael Bembom, and Christian Schwens. "CEO characteristics and SME foreign market entry mode choice." International Marketing Review 33, no. 2 (April 11, 2016): 246–75. http://dx.doi.org/10.1108/imr-08-2014-0288.
Повний текст джерелаАнотація:
Purpose – Using arguments from the upper echelons perspective this paper aims to examine the impact of CEO characteristics on small and medium-sized enterprises’ (SMEs’) equity foreign market entry mode choice and how these associations are jointly moderated by geographic experience of the firm and host-country political risk. Design/methodology/approach – The empirical analysis draws on data gathered from German SMEs testing triple-interaction effects between CEO’s age, firm tenure and international experience, geographic experience of the firm (organizational level), and host-country political risk (environmental level). Findings – Empirical findings validate that the influence of CEO’s age and firm tenure on SME foreign market entry mode choice varies by managers’ level of managerial discretion (i.e. latitude of action) as determined by the SME’s geographic experience and the level of political risks prevailing in the foreign market. Practical implications – Empirical findings help SME owners and managers to understand how CEO’s age and firm tenure are related with individual’s risk-taking behavior and information-processing demands and how these contingencies vary by the context in which the individual CEO is nested. Originality/value – This study contributes to the growing body of literature focussing on SME foreign market entry mode choice by emphasizing the important role of CEOs in the decision to internationalize. More specific, this study contributes by an examination of the interactive effect of CEO’s age, firm tenure and international experience, geographic experience of the firm and host-country political risk and, therefore, emphasizes the context and boundary conditions under which the association between CEO characteristics and foreign market entry mode choice is more or less pronounced.
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Isakin, Maksim, and Xiaoling Pu. "Practical Applications of The Impact of Firm-Level Political Risk on Creditor Control." Practical Applications 7, no. 4 (February 12, 2020): 1.9–4. http://dx.doi.org/10.3905/pa.7.4.370.
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Lee, Wei, and Lihong Wang. "Do political connections affect stock price crash risk? Firm-level evidence from China." Review of Quantitative Finance and Accounting 48, no. 3 (March 14, 2016): 643–76. http://dx.doi.org/10.1007/s11156-016-0563-3.
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Bryan, Stephen, and LeeSeok Hwang. "CEO Compensation in a Regulatory Environment: An Analysis of the Electric Utility Industry." Journal of Accounting, Auditing & Finance 12, no. 3 (July 1997): 223–51. http://dx.doi.org/10.1177/0148558x9701200303.
Повний текст джерелаАнотація:
Prior studies argue that a firm's investment opportunity set affects the level of information asymmetry and thereby the structure of CEO compensation. We test whether the political constraints imposed in a regulatory environment incrementally affect both the level and the structure of CEO compensation, while controlling for the effects of investment opportunity set and other firm characteristics. We hypothesize that increased political constraints reduce the need and the opportunity to pay management bonuses, stock options, and other incentive-based compensation, in addition to a base salary. We test our hypothesis using CEO compensation data from electric utility companies during 1990–1995. We develop refined measures for different levels of regulation and monitoring within the electric utility industry. Our results provide evidence that increased political constraints affect both the level and structure of CEO compensation, after controlling for investment opportunity set and other firm characteristics, such as firm size, systematic risk, and performance.
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Barry, Colin M., and Matthew DiGiuseppe. "Transparency, Risk, and FDI." Political Research Quarterly 72, no. 1 (June 17, 2018): 132–46. http://dx.doi.org/10.1177/1065912918781037.
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A central theme in the foreign direct investment (FDI) literature is that political risk deters investment. The empirical record, however, is mixed. multinational corporations (MNCs) continue to invest in high-risk countries. We argue it is not merely about the level of risk, but rather firms’ ability to quantify risk. When MNCs can confidently assess both the nature and the degree of the threats present, they can take appropriate measures to hedge against them. This should increase their willingness to invest, even in higher risk environments. We contend that the ability to accurately quantify risk is a function of political transparency. Among opaque countries, we expect risk to exert a deterring effect on FDI, as commonly theorized. Among more transparent countries, however, we expect that risk is a less salient concern for MNCs. We test this argument using firm-level data on the foreign operations of some of the world’s largest multinationals between 1995 and 2008. The evidence supports the argument. Risk has a strong negative effect on the likelihood of investment at lower levels of transparency, but the magnitude of this effect weakens at higher levels of transparency. This pattern is consistent across multiple types of political risk, and is most pronounced in nonextractive (relative to extractive) industries.
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Graham, Kenneth, and Robert Moore. "The Role of Dynamic Capabilities in Firm-Level Technology Adoption Processes: A Qualitative Investigation." Journal of Innovation Management 9, no. 1 (May 1, 2021): 25–50. http://dx.doi.org/10.24840/2183-0606_009.001_0004.
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Increasingly, marketers rely on advances in technology to maintain competitive parity or gain competitive advantage. Yet, often, the adoption of technology is met with suboptimal results and even outright failure. Qualitative field research based on depth interviews with business managers responsible for technology adoption decisions within their respective firms is used to develop a theoretical framework explaining the technology adoption process within firms, how expectations are formed for the innovation’s performance and factors that can further influence those perceptions. Result suggest a firm’s dynamic capabilities play a central role in informing the firm’s perceptions of a technological innovation’s characteristics that drive the adoption decision. Findings also suggest that a firm’s expectations are influenced by perception of risk, internal micro-political actions, and the opportunity to observe or trial use of the technological innovation.
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Chatjuthamard, Pattanaporn, Pornsit Jiraporn, Pattarake Sarajoti, and Manohar Singh. "The effect of political risk on shareholder value and the mitigating role of corporate social responsibility (CSR)." Managerial Finance 46, no. 10 (May 21, 2020): 1217–30. http://dx.doi.org/10.1108/mf-09-2019-0475.
Повний текст джерелаАнотація:
PurposeThe study investigates the effect of political risk on shareholder value, using an event study and a novel measure of firm-level political risk recently developed by Hassan et al. (2017). In addition, the authors explore how corporate social responsibility (CSR) influences the effect of political risk on shareholder wealth.Design/methodology/approachThe authors exploit the guilty plea of Jack Abramoff, a well-known lobbyist, on January 3, 2006, as an exogenous shock that made lobbying less effective and less useful in the future, depriving firms of an important tool to reduce political exposure.FindingsThe results show that the market reactions are significantly more negative for firms with more political exposure. Additional analysis corroborates the results, including propensity score matching, instrumental-variable analysis and Oster's (2019) method for testing coefficient stability. Finally, the authors note that the adverse effect of political risk on shareholder value is substantially mitigated for firms with strong social responsibility, consistent with the risk mitigation hypothesis.Originality/valueThis study is the first to explore the effect of political risk on shareholder value using a novel measure. Furthermore, it is also the first to show that CSR alleviates the cost of political risk to shareholders.
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Dobler, Michael, Kaouthar Lajili, and Daniel Zéghal. "Corporate environmental sustainability disclosures and environmental risk." Journal of Accounting & Organizational Change 11, no. 3 (September 7, 2015): 301–32. http://dx.doi.org/10.1108/jaoc-10-2013-0081.
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Purpose – This paper aims to propose and apply a novel risk-based approach to explore whether socio-political theories explain the level of corporate environmental disclosures given inconclusive evidence on the relation between environmental disclosure and environmental performance. Design/methodology/approach – Based on content analysis of corporate risk reporting, the paper develops measures of environmental risk to proxy for a firm’s exposure to public pressure in regard to environmental concerns that should be positively associated with the level of corporate environmental disclosures according to socio-political theories. Multiple regressions are used to test the predictions of socio-political theories for US Standards and Poor’s 500 constituents from polluting sectors. Findings – The level of environmental disclosures is found to be positively associated with a firm’s environmental risk while unrelated to its environmental performance. The findings suggest that firms tend to provide higher levels of environmental disclosures in response to greater exposure to public pressure as depicted by broad environmental indicators. The results are robust to alternative measures of environmental disclosures, environmental risk and environmental performance, alternative specifications of the economic model and additional sensitivity checks. Research limitations/implications – This study is limited to US firms in polluting sectors. The risk-based approach proposed may not be appropriate to cover sectors where corporate risk reporting is less likely to address environmental risk, but it could potentially be adopted in other countries with advanced risk reporting regulation or practice. Practical implications – Findings are important to understand a firm’s incentives to disclose environmental information. Cross-sectional differences found in environmental disclosures, risk and performance, highlight the importance of considering industry affiliation when analyzing environmental data. Originality/value – This paper is the first to use firm-level environmental risk variables to explain the level of corporate environmental disclosures. The risk-based approach taken suggests opportunities for research at the multi-country level and in countries where corporate environmental performance data are not publicly available.
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Klumpes, P., C. Ledlie, F. Fahey, G. Kakar, and S. Styles. "Incentives facing UK-listed companies to comply with the risk reporting provisions of the UK Corporate Governance Code." British Actuarial Journal 22, no. 1 (November 15, 2016): 127–52. http://dx.doi.org/10.1017/s1357321716000180.
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AbstractRecent changes made to the UK Corporate Governance Code require UK firms to report new or enhanced narrative information concerning their principal risks, their risk management processes and their future viability. This paper analyses whether the level and nature of voluntary compliance with these new requirements is consistent with alternative economic and political visibility incentives. We analyse relevant sections of financial reports produced by industry-matched samples of large-, mid- and small-cap UK-listed firms during the transitional 2013–2014 financial reporting years. Both specific and generic readability attributes of the reports are measured. We find that virtually no firm in our sample has provided any viability statement. Empirical analysis of disclosures concerning principal risk assessment and review processes appear to be primarily motivated by political visibility reasons. Examples of particularly good and cases of poor corporate risk reporting practices are also discussed. Possible implications for the actuarial profession are discussed.
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Chong, Alberto, and Paul Alexander Haslam. "Social Conflict in Rural Regions and Firm Ownership: Evidence from the Mining Sector in Latin America." Latin American Economic Review 29 (2020): 1–15. http://dx.doi.org/10.47872/laer-2020-29-2.
Повний текст джерелаАнотація:
Using firm-level data for five countries in Latin America we find a negative and statistically significant link between social conflict in rural areas and ownership of mines. This result suggests that the social conflict around mining projects can affect strategic firm behavior intended to diversify risk in the face of social, political and financial pressures. It constitutes evidence that the costs of social conflict can be considered a serious challenge for firms and diverges from the literature which has generally viewed these costs as relatively unimportant to investment decisions. We apply broad sensitivity tests and find that this is robust. Our results also hold to a formal test of changes in specification.
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Xu, Peiyuan, and Yongzhong Wang. "Investment Experience, Bilateral Investment Treaty and China’s ODI: A New Angle to Explain Risk Preference." International Journal of Business and Management 15, no. 1 (December 14, 2019): 109. http://dx.doi.org/10.5539/ijbm.v15n1p109.
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This paper investigates the role of investment experience in Chinese outward direct investment based on deal-level data from FDI Intelligence and Dealogic data. We use gravity model to test the Chinese firm’s risk attitude and how this attitude is adjusted by firm’s previous investment experience and Bilateral Investment Treaty (BIT). The results show that, first, investment experience has a stimulating effect on s (next) investment scale. This stimulating effect is positively correlated with the concreteness of the investment experience; Second, China’s ODI still has an appetite. Firms tend to investing in countries of high corruption risk, government efficiency risk, political stability risk, regulation quality risk and rule of law risk, but not voice and accountability risk; Third, previous investment experience has a moderating effect on risk preference. That is to say, firms with richer experience tend to be more risk averse; Finally, the existence of investing partner does have a positive moderating effect on firms’ risk preference making firms more risk averse, while the BIT has a stronger but negative moderating effect on risk preference, making firms more aggressive, especially for resource industry. It is inferred that BIT provides a solid safety net for Chinese resource companies since they’re mostly state-owned and have keen relationship with Chinese government.
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Healy, Robert Lawrence, and Spiro Maroulis. "Business and political process reform: ignore or engage?" Society and Business Review 14, no. 3 (October 11, 2019): 254–63. http://dx.doi.org/10.1108/sbr-06-2018-0067.
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Purpose The purpose of this paper is twofold. First, the authors elaborate on why American businesses are often willing to advocate and deploy corporate political resources for or against specific governmental policies, but largely reluctant to engage in more general political process reform. Second, the authors introduce a set of ideas encouraging a business-driven political process reform in the USA, which the authors refer to as Corporate Political Responsibility (CPR). Design/methodology/approach This paper reviews existing literature on why firms generally avoid advocating for political process reform to identify several firm-level impediments to such action. As an outcome of that review, a CPR governance concept – a derivative from the corporate responsibility literature – is proposed and unpacked as a proposition that if adopted by firms would encourage and support business-driven process reform advocacy. Findings The primary findings are that American firms lack a rationale justifying business political activity into the political process arena; a willingness to assume a high level of political risk associated with political process intervention; and an executable corporate mechanism for doing so. Research limitations/implications A second stage build out of the paper would involve at a minimum multiple research interviews with corporate executives and trade association officials to test the viability of the CPR proposal as to whether or not the proposed governance statement would liberate firms to advocate political process reform. This paper sets the predicate for additional research. Originality/value This paper may well be the first to identify the concept of CPR as a key corporate governance proposition. It is also likely the first to conceptualize CPR as more than a theoretical rendering – it is executable. Corporations can put CPR into practice through a firm’s Board of Directors endorsing a governance statement – Corporate Political Responsibility Protocol (CPR/P) – that transforms the CPR concept into a sanctioned firm activity, giving executives significant latitude to spend corporate resources advocating political process change. This paper suggests a variety of reform possibilities – electoral, campaign finance and legislative – that could benefit from business reform advocacy.
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Randall, Robert W. "British Company and Mexican Community: The English at Real del Monte, 1824–1849." Business History Review 59, no. 4 (1985): 622–44. http://dx.doi.org/10.2307/3114597.
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While it lost some five million dollars operating in Mexico between 1824 and 1849, the British Real del Monte Company conducted its business without major interruption from the political turbulence that characterized the new nation. In this article, Professor Randall shows how the company finessed most of the political risk that it potentially faced by keeping administrative distance between itself and the ever-changing central governments and by conducting political relations at the local level as community relations. Despite business rivalries with mine owners, labor-management conflict, and incidents of individual and institutional friction, the English firm and the Mexican town of Real del Monte generally maintained positive community relations. Accommodation as much as conflict accompanied foreign penetration into newly independent Mexico.
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Krammer, Sorin M. S. "Greasing the Wheels of Change: Bribery, Institutions, and New Product Introductions in Emerging Markets." Journal of Management 45, no. 5 (October 23, 2017): 1889–926. http://dx.doi.org/10.1177/0149206317736588.
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Despite the consensus on the negative country-level implications of corruption, its consequences for firms are less understood. This study examines the effect of bribery on the innovative performance of firms in emerging markets as reflected by new product introductions. I argue that bribery may help innovators in these markets to introduce new products by overcoming bureaucratic obstacles, compensating for the lack of kinship or political affiliations, and hedging against political risk. I also propose that the relationship between firm bribery and new product introduction will be negatively moderated (i.e., weakened) by the quality of the formal and informal institutions in place. Employing data from over 6,000 firms in 30 emerging markets and a wide range of empirical tests, my results support these hypotheses. These findings extend transaction costs economics by showing that bureaucratic obstacles and uncertainty can drive firms into illegal cost minimization strategies. Moreover, they augment institutional theory by expounding upon the ways that norms and informal practices moderate the efficiency of firm strategies in emerging markets.
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Fu, Xiaolan, Jizhen Li, Hongru Xiong, and Henry Chesbrough. "Open Innovation as a Response to Constraints and Risks: Evidence from China." Asian Economic Papers 13, no. 3 (October 2014): 30–58. http://dx.doi.org/10.1162/asep_a_00289.
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This paper examines the determinants of open innovation as a response to the constraints and risks of innovation that firms face in emerging economies. A recent national firm-level survey of 1,400 firms in the manufacturing sector is used as the basis of the analysis. We find that institutional, financial and knowledge/skills-related risks and constraints are all significantly associated with these firms' depth and breadth of openness in innovation. The responses, however, vary across firms of different ownership types. Foreign-invested firms appear to be most responsive and take action to widen and deepen their openness in innovation. Privately owned firms have made significant responses to market- and institution- and finance- and risk-related impediments but not to knowledge- and skills-related impediments. State-owned firms appear to be least responsive in use of open innovation. Firm size and industry specific effects also appear to have significant moderating effect on firms' responses to the various constraints. These findings are supported by an in-depth study of the Chinese semiconductor industry.
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Allen, Jeffrey S. "Do Targeted Trade Sanctions Against Chinese Technology Companies Affect US Firms? Evidence from an Event Study." Business and Politics 23, no. 3 (March 2, 2021): 330–43. http://dx.doi.org/10.1017/bap.2020.21.
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AbstractThis article asks how costly targeted trade sanctions imposed by the US government are for domestic firms. I argue that, as a result of sanctions, the firm value of US companies that have supply relationships with sanctioned entities is likely to suffer from lost revenue, reputational damage, and business model uncertainty. I test this expectation by applying an event study to the important case of targeted trade sanctions against Chinese technology companies. I find that sanctions against these companies reduced their US suppliers’ risk-adjusted stock returns by 220 basis points. Firm-level cross-sectional analysis shows that businesses with stronger ties to the sanctioned entities are more negatively affected, which supports the direct connection between sanctions and relevant suppliers. Measuring the domestic economic ramifications of sanctions for the sender country has been elusive. These findings, which are statistically and economically significant, indicate that US companies face notable costs from sanctions against internationally active firms.
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Cambra-Fierro, Jesús, Iguácel Melero-Polo, F. Javier Sese, and Jenny van Doorn. "Customer-Firm Interactions and the Path to Profitability." Journal of Service Research 21, no. 2 (November 9, 2017): 201–18. http://dx.doi.org/10.1177/1094670517738369.
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This study investigates a chain of effects to understand the causal path from customer informational inquiries (CIIs) and firm-initiated contacts (FICs) to customer profitability. Drawing on social exchange theory, our framework identifies a set of attitudinal (perceived relationship investment and relationship quality), behavioral (customer cross-buy and service usage), and financial (customer profitability) consequences of CIIs and FICs and also explores the extent to which customer-perceived financial risk and customer involvement shape attitudinal reactions to CIIs and FICs. Using longitudinal data for a sample of 1,990 customers measured in four different periods, the framework is tested in financial services by applying seemingly unrelated regression techniques. Our results reveal that FICs and CIIs are a particularly valuable tool for strengthening the relationship with customers with a low level of involvement but high perception of financial services risk. For highly involved customers, FICs and CIIs are not very effective; CIIs can even backfire if the customer also perceives the risk to be low. Our results highlight the importance of market segmentation for marketers to more effectively manage when and to whom they should target marketing activities (FICs) and steer CIIs.
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Rogmans, Tim. "Hay Group in the Middle East." Emerald Emerging Markets Case Studies 1, no. 1 (January 1, 2011): 1–4. http://dx.doi.org/10.1108/20450621111110302.
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Subject area Management consulting, foreign direct investment, location decisions, business planning. Study level/applicability Undergraduate and Postgraduate Business and Management or Executive Education. Case overview This case outlines the location decision-making process for Hay Group, a global management consulting firm. The process and factors involved in making decisions on new office openings in the Middle East region are highlighted. Particular attention is paid to location factors such as legislation, taxes, political risk and market attractiveness. Expected learning outcomes The case enables participants to learn about business conditions in the Middle East and to develop a business case for the opening of operations in new markets. Supplementary materials A teaching note is available on request.
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Egan, Patrick J. W. "R&D in the periphery? Foreign direct investment, innovation, and institutional quality in developing countries." Business and Politics 15, no. 1 (April 2013): 1–32. http://dx.doi.org/10.1515/bap-2012-0038.
Повний текст джерелаАнотація:
This paper considers the relationship between assessments of institutional quality in developing countries and the innovative activities of multinational corporations. Firm entry mode literature has established links between domestic institutions and ownership equity patterns among multinationals, but institutionalist analyses have not adequately addressed the types of activities pursued by multinational firms. I argue that in addition to various socioeconomic indicators, the quality of domestic political institutions in developing countries is an important determinant of local innovative activity. I argue that institutional quality in host countries reinforces consistent patterns of interaction between states and firms, leading to reduced risk of technological expropriation and other undesirable outcomes for firms. I test this argument by examining the impact of institutional assessments, carried out by firms themselves and by outside observers, on R&D effort among multinationals, using firm-level surveys conducted in developing countries between 2002 and 2005. The multilevel empirical analysis suggests that multinational firms are likely to both locate R&D activities and pursue them intensively in developing countries with well-regarded institutions, and that the impact of institutional variables is more significant than other likely predictors, such as education levels in host countries.
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Kang, Yuanfei, and Yulong Liu. "Natural resource-seeking intent and regulatory forces." Management Research Review 39, no. 10 (October 17, 2016): 1313–35. http://dx.doi.org/10.1108/mrr-05-2015-0126.
Повний текст джерелаАнотація:
Purpose This study aims to investigate how natural resource-seeking as a type of strategic intent influences foreign direct investment (FDI) location choice. Grounded in the strategic intent approach and institution theory, the authors developed an interactive conceptual framework by integrating natural resource-seeking intent (NRI) with regulatory institutional factors. Design/methodology/approach The authors developed an interactive conceptual framework by integrating NRI at a firm level with regulatory factors of governmental support, political risk and economic freedom at country level. Using empirical data from a sample of 137 Chinese outward foreign direct investment (OFDI) projects in 19 Asian countries, statistical analysis was conducted using a conditional logistic regression technique. Findings Empirical findings from our study suggest that NRI has a strong influence on OFDI location choice of the Chinese firms. More importantly, the results demonstrate that influence of NRI on location choice is contingent on the regulatory forces both in the home and host countries settings. NRI is more likely to influence FDI location choice when government support from the home country is stronger and/or when political risk in a host country FDI is higher. Originality/value This is an empirical-based original study, and it contributes to the literature in several ways. First, the study enriches the strategic intent approach by demonstrating the contingency conditions from regulatory factors, especially home government support on a firm’s pursuit of NRI. Second, the study provides an explanation for the behaviour pattern of Chinese OFDI regarding their response to political risk in a host country. Third, the study demonstrates the influence of “institutional embededness” on the firm’s strategic intent. Managerial and policy implications are also discussed.
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Viswanathan, Satish Kumar, and Kumar Neeraj Jha. "Risk mitigation modelling of international construction projects executed by Indian firms: a structural equation modelling approach." Engineering, Construction and Architectural Management 27, no. 9 (May 28, 2020): 2687–713. http://dx.doi.org/10.1108/ecam-05-2019-0265.
Повний текст джерелаАнотація:
PurposeA number of previous studies have investigated international construction project risks and have proposed risk mitigation measures without examining their interdependence. The purpose of the current study is to identify the influence of various risk mitigation measures on macro-level risk factors in the international marketplace.Design/methodology/approachThe authors initially identified 26 risk variables and nine risk mitigation measures through a literature review, which were then verified for their pertinence to international projects by three experts. Subsequently, 105 questionnaire survey responses were collected and analysed using factor analysis and structural equation modelling to test the interrelations between the risk variables and mitigation measures.FindingsThe findings suggest that joint ventures with local partners is emerged as the most critical risk mitigation measure that influences the international projects, which are exposed to political, project and firm-specific risk factors. Further, it is worth noting that among the recognised risk mitigation measures in international projects, offering more local employment is the least critical mitigation measure in the international projects.Research limitations/implicationsThe findings of this study are based on the macro-risk factors encountered by Indian construction firms in international projects, mostly from specific Asian and African regions. Thus, the opinions of construction firms from the developed countries might be different.Originality/valueThe main contribution of this study to existing knowledge is empirical evidence of the interrelationships between risk mitigation measures and risk factors that are portrayed as latent variables of different manifest risk variables. The generated model can assist construction firms in emphasising several risk mitigation methods, in order to reduce risk and enhance performance in international construction projects.
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Doctor, Austin C., and Stephen Bagwell. "Risky Business: Foreign Direct Investment and the Economic Consequences of Electoral Violence." Journal of Global Security Studies 5, no. 2 (March 3, 2020): 339–60. http://dx.doi.org/10.1093/jogss/ogz070.
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Abstract While the social and political consequences of electoral violence are widely discussed in the literature, less is known about the economic repercussions of electoral violence. Our study investigates this dynamic, asking how episodes of electoral violence affect existing levels of foreign direct investment. We argue that, when managing their investments in foreign markets, multinational firms weigh the expected gains of the investment with the probability that the host country experiences significant lapses in political stability. Electoral violence signals a greater risk of this undesirable outcome and, thus, increases the probability that firms divest in favor of more favorable investment environments. Using firm-level data, we investigate the investment behavior of seventy-seven multinational firms in twenty-five Sub-Saharan African countries from 1995 to 2008 with a series of logistic regression models. Directly modeling the choices that firms make with respect to yearly changes in investment, we demonstrate that firms are more likely to divest following events of electoral violence in a host country. This study carries important implications for our understanding of how electoral violence may undermine the economic stability of emerging economies.
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Simonet, Daniel. "Entry modes of European firms in Vietnam." EMAJ: Emerging Markets Journal 2, no. 2 (September 11, 2012): 9–16. http://dx.doi.org/10.5195/emaj.2012.27.
Повний текст джерелаАнотація:
Purpose: The purpose of the paper is to explore the entry modes of EU firms setting up operations in Vietnam. Design/methodology/approach: we use a case study approach on Haymarket, Cadbury, Creative Education, Fairchild, Aventis and Artemisinin and Farming International using interviews from managerial professionals in Vietnam. Findings: Despite the fact that Vietnam has been opening up for more than 20 years, licensing is the preferred entry mode because of the risks involved in venturing with local firms; that preference signals a low level commitment and a high perception of risk and state interference. In line with Vietnam transition to state - rather than private market - capitalism, a foreign company opting for a joint-venture will do so with a state-owned rather than privately-owned company. The choice of a subsidiary can be explained by the lack of trust in partners and institutions, not by improvement in the socio-political environment. Limitations: In determining the entry mode strategy, the paper focuses on the Uppsala school’s “psychic distance” (e.g. cultural distance, lack of trust) rather than on firm-specific advantages (Rugman, 1980; 2006). Key-words: international entry mode; emerging markets; subsidiary; joint-venture; India; Vietnam
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Rialp-Criado, Alex, Seyed Meysam Zolfaghari Ejlal Manesh, and Øystein Moen. "Home (not so) sweet home." critical perspectives on international business 16, no. 4 (July 29, 2019): 379–406. http://dx.doi.org/10.1108/cpoib-03-2018-0031.
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Purpose This paper aims to elaborate on the crucial effects that a seemingly detrimental policy change in Spain has had on the international entrepreneurial activities of domestic renewable energy (RE) firms. Design/methodology/approach Primary data were collected from nine RE companies in Spain and then triangulated with secondary data and interviews from informants in other local institutions. Findings Domestic RE firms, due to an institutional scape driver action, reacted to an increasingly uncertain and generally more adverse renewable energy policy framework in this country by preferring to internationalise towards foreign markets that had lower political uncertainty than the domestic one. Research limitations/implications This paper complements previous research primarily on firm-specific factors that enhance internationalising firms’ survival and growth through a focus on the impact of a changing institutional-political environment at the home country-level. Practical implications Practitioners in the RE sector should analyse the risk of focusing only on the home market, as it can be too dependent on uncontrolled variations in domestic energy policy. Social implications The findings indicate that a more stable and supportive, long-term perspective in the domestic RE policy is essential for the sustained growth and development of this emerging industry. Originality/value To analyse the strategy by which a number of purposefully selected companies were able to use international expansion as a survival-seeking strategy against a drastic policy-level change in the domestic RE market.
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Hou, Huiying, and Hao Wu. "What influence domestic and overseas developers’ decisions?" Journal of Property Investment & Finance 37, no. 2 (March 4, 2019): 153–71. http://dx.doi.org/10.1108/jpif-12-2018-0092.
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PurposeForeign firms entering into the domestic real estate industry and foreign investment control are significant in global hot markets such as Australia. Despite their market impact and policy sensitivity, developer choice is rarely studied. The purpose of this paper is to study domestic and overseas property developers for their motive and preference in response to market growth and market barriers including regulatory constraint.Design/methodology/approachInternational trade theory suggests local and overseas firms can vary significantly for their risk profile when engaging in location-specific development opportunities. Using a comprehensive decision factor system for the residential development process, the authors conducted an experimental survey to collect the prime data to measure stated preference of domestic and overseas developers in the context of the Melbourne residential market.FindingsResults suggest high consistency between the samples of domestic and overseas developers. Possible explanations include vertical integration by innovative contracting, strict regulatory constraint dictates domestic and overseas firms’ preference or sample selection bias. This micro-analysis of developer stated preference highlights their entrepreneurial ability to combine substitution and integration for innovative contractual strategy. This ability to join asset holding and project management enables firm flexibility to mitigate business risk in rapidly globalising capital and factor markets.Practical implicationsThese insights of firm-level decision making contribute to the decision literature of real estate developers and are relevant to the broader literature of industrial economics and international trade. Government may evaluate policy strategies based on the explicit entrepreneur (e.g. developer) preference for their “comparative advantage”.Originality/valueThis paper highlights developer’s ability to jointly consider investment and project management for decision making. It found that other than political cost such as national interest and domestic interest group pressure, domestic and overseas developers in the Melbourne residential market actually think quite alike. It suggests that irrespective of property ownership conditions, market integration occurs in the Melbourne residential sector.
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Omar, Maktoba, and Collins Osei. "An investigative analysis of the factors influencing degree of involvement in a foreign market." Transnational Marketing Journal 3, no. 1 (May 31, 2015): 45–60. http://dx.doi.org/10.33182/tmj.v3i1.408.
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This paper focuses on factors that influence the degree of involvement in foreign markets. Using survey method, the research data was obtained from 112 usable responses from a sample of 500 UK companies which operate in at least two other countries. This represents a usable response rate of 22.4%, and consistent with similar research. The variables are grouped in terms of firm context (competition, organisation structure, competitive advantages, degree of standardisation) and host country context (economic development, culture differences, regulation, political risk). Regression models are used to test the relationship between the independent variables and the degree of involvement. Findings strongly indicate a positive relationship between the degree of foreign market involvement and the level of competition and the degree of foreign market involvement and competitive advantage. Findings weakly support the hypothesis of a positive relationship between the degree of foreign market involvement and economic development. There is weaker evidence to show a negative relationship between the degree of foreign market involvement and the cultural dimensions of individualism and power distance as proposed by Hofstede.
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Hussain, Hafezali Iqbal, Sebastian Kot, Hassanudin Mohd Thas Thaker, and Jason J. Turner. "Environmental Reporting and Speed of Adjustment to Target Leverage: Evidence from a Dynamic Regime Switching Model." Organizacija 53, no. 1 (February 1, 2020): 21–35. http://dx.doi.org/10.2478/orga-2020-0002.
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AbstractBackground and Purpose: This study investigates the impact of environmental reporting on speed of adjustment and adjustment costs which is evaluated based on the ability of firms to adjust to target leverage level for non-financial firms listed in the Malaysian Stock Exchange (Bursa Malaysia).Design/Methodology/ Approach: The study selects Malaysian firms based on the contracting and political cost of the economy which is seen as a relationship-based economy. This in turn influences a firm’s ability to obtain external financing and thus has an important impact on capital structure decisions. In addition, the method employed allows for a direct measure on adjustment cost for firms. The current study utilises a dynamic regime switching model based on the DPF estimator to estimate rate of adjustment to optimal target levels based on the distinction of environmental reporting of public listed firms. The approach allows statistical inferences to control for potential serial correlation, endogeneity and heterogeneity concerns which accounts for firm specific characteristics.Results: The empirical findings suggest voluntary disclosure on environmental reporting increases a firm’s ability to access external financing at a cheaper cost as evidenced by a more rapid rate of adjustment. The findings are consistent across differing endogenous and exogenous factors indicating that these firms tend to face lower adjustment costs.Conclusion: The current study provides a direct measure on the ability of firms to adjust to target levels via security issues and repurchases in the capital markets. This in turn is a reflection of perceived riskiness and value from the investors’ point of view in an emerging market. Prior studies have focused on environmental reporting and equity risk premiums and have not evaluated the direct impact on firm value given that the trade-off theory of capital structure predicts that firm value is maximised at target i.e. optimal levels of leverage. This study addresses the current gap in the literature by evaluating the impact on firms’ value, based on the adjustment cost.
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Pento, Tapio. "Industrial Ecology of the Paper Industry." Water Science and Technology 40, no. 11-12 (December 1, 1999): 21–24. http://dx.doi.org/10.2166/wst.1999.0690.
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Industrial ecology (IE) is a biological concept applied to industrial structures. The basic concepts of IE include regional, intra-firm and product-based waste recycling systems as well as the principle of upward and downward cascading. In best current examples of regional systems, several parties are in an industrial waste re-use symbiosis. Paper industry has learned to arrange the recovery and re-use of its products on distant markets, even up to a level where indications of exceeding optimal recovery and re-use rates already exist through deteriorated fibre and product quality. Such occurrences will take place in certain legislative-economic situations. Paper industry has many cascade levels, each with their internal recovery and recycling, as well as many intra-firm, regional, and life cycle ecology structures. As an example of prospects for individual cascading routes, sludges may continue to be incinerated, but the route to landfills will be closed. The main obstacles of legislative drive toward better IE systems are in many cases existing laws and political considerations rather than economic or technical aspects. The study and practice of engineering human technology systems and related elements of natural systems should develop in such a way that they provide quality of life by actively managing the dynamics of relevant systems to reduce the risk and scale of undesirable behavior and outcomes. For the paper industry, earth systems engineering offers several development routes. One of them is the further recognition of and research on the fact that the products of the industry are returned back to the carbon cycle of the natural environment. Opportunities for modifying current earth systems may also be available for the industry, e.g. genetically modified plants for raw materials or organisms for making good quality pulp out of current raw materials. It is to be recognized that earth systems engineering may become a very controversial area, and that very diverse political pressures may determine its future usefulness to the paper industry.
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Vojinović, Željko, Sunčica Milutinović, Dario Sertić, and Bojan Leković. "Determinants of Sustainable Profitability of the Serbian Insurance Industry: Panel Data Investigation." Sustainability 14, no. 9 (April 25, 2022): 5190. http://dx.doi.org/10.3390/su14095190.
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This paper aims to investigate the main drivers of sustainable profitability trends in the Serbian insurance industry over the years 2008–2019 (inclusive). Our study is motivated by the fact that insurance companies contribute to economic growth, and thus it is essential to understand the factors that contribute to their financial strength and stability. We use a set of standard panel regression models, including the mixed-effects model, followed by a more robust GMM estimation to uncover the linkage between selected micro-specific, macroeconomic, and institutional factors, and return of assets (ROA) and return on total premiums (ROTP). The present paper constitutes a significant contribution to the existing literature on the account of its comprehensiveness both in terms of the institutional datasets that we use, and in terms of the methodologies we apply (in particular, mixed effects and the generalized method of moments (GMM)). The estimated parameters are model-specific, and we find that firm size, GDP, the population growth rates, political stability, and the degree of specialization (in some empirical models) all lead to higher profitability. On the other hand, we observe that excessive risk-taking and inflation (in some specifications) are inversely related to profitability. Finally, we note that regulatory quality, average wage, and life expectancies are found to be not statistically significant. Accordingly, we argue that a profitability-centric managerial strategy should be based on expanded market share and stringent risk management protocols. At the macro level, we conclude that pro-growth and pro-population policies, combined with a well-oiled institutional setting that ensures political stability, constitute the best possible prescription for strong operational performance and profit sustainability in the Serbian insurance industry.
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Vojinović, Željko, Sunčica Milutinović, Dario Sertić, and Bojan Leković. "Determinants of Sustainable Profitability of the Serbian Insurance Industry: Panel Data Investigation." Sustainability 14, no. 9 (April 25, 2022): 5190. http://dx.doi.org/10.3390/su14095190.
Повний текст джерелаАнотація:
This paper aims to investigate the main drivers of sustainable profitability trends in the Serbian insurance industry over the years 2008–2019 (inclusive). Our study is motivated by the fact that insurance companies contribute to economic growth, and thus it is essential to understand the factors that contribute to their financial strength and stability. We use a set of standard panel regression models, including the mixed-effects model, followed by a more robust GMM estimation to uncover the linkage between selected micro-specific, macroeconomic, and institutional factors, and return of assets (ROA) and return on total premiums (ROTP). The present paper constitutes a significant contribution to the existing literature on the account of its comprehensiveness both in terms of the institutional datasets that we use, and in terms of the methodologies we apply (in particular, mixed effects and the generalized method of moments (GMM)). The estimated parameters are model-specific, and we find that firm size, GDP, the population growth rates, political stability, and the degree of specialization (in some empirical models) all lead to higher profitability. On the other hand, we observe that excessive risk-taking and inflation (in some specifications) are inversely related to profitability. Finally, we note that regulatory quality, average wage, and life expectancies are found to be not statistically significant. Accordingly, we argue that a profitability-centric managerial strategy should be based on expanded market share and stringent risk management protocols. At the macro level, we conclude that pro-growth and pro-population policies, combined with a well-oiled institutional setting that ensures political stability, constitute the best possible prescription for strong operational performance and profit sustainability in the Serbian insurance industry.
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Wells, Victoria, Felicity Greenwell, Judith Covey, Harriet E. S. Rosenthal, Mike Adcock, and Diana Gregory-Smith. "An exploratory investigation of barriers and enablers affecting investment in renewable companies and technologies in the UK." Interface Focus 3, no. 1 (February 6, 2013): 20120039. http://dx.doi.org/10.1098/rsfs.2012.0039.
Повний текст джерелаАнотація:
The last few years have seen considerable research expenditure on renewable fuel technologies. However, in many cases, the necessary sustained and long-term funding from the investment community has not been realized at a level needed to allow technologies to become reality. According to global consulting firm Deloitte's recent renewable energy report ( http://www.deloitte.com/energypredictions2012 ), many renewable energy projects stalled or were not completed because of issues including the global economy, the state of government finances, difficulties in funding and regulatory uncertainty. This investigation concentrates on the funding aspect and explores the perceived barriers and enablers to renewable technologies within the investment and renewables community. Thematic analysis of 14 in-depth interviews with representatives from renewable energy producers, banks and investment companies identified key factors affecting the psychology of investor behaviour in renewables. Eight key issues are highlighted, including a range of barriers and enablers, the role of the government, balance between cost/risk, value/return on investment, investment time scales, personality/individual differences of investors and the level of innovation in the renewable technology. It was particularly notable that in the findings the role of the government was discussed more than other themes and generally in quite critical terms, highlighting the need to ensure consistency in government funding and policy and a greater understanding of how government decision-making happens. Specific findings such as these illustrate the value of crossing disciplinary boundaries and highlight potential further research. Behavioural science and economic psychology in particular have much to offer at the interface of other disciplines such as political science and financial economics.
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Popoola, Oluwatoyin Muse Johnson. "Preface to the Volume 2 Issue 1 of Indian-Pacific Journal of Accounting and Finance." Indian-Pacific Journal of Accounting and Finance 2, no. 1 (January 1, 2018): 1–3. http://dx.doi.org/10.52962/ipjaf.2018.2.1.43.
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It is a pleasure and admiration to welcome you to the Volume 2 Issue 1 of Indian-Pacific Journal of Accounting and Finance. In this Issue 1, the emphasis is placed on forensic accounting, accounting, auditing and corporate governance.
In the first paper captioned “Mitigating Corruption Using Forensic Accounting Investigation Techniques: The Watchdog Perspectives”, Mr. Naziru Suleiman (Department of Accounting, Abubakar Tafawa Balewa University Bauchi, Nigeria) and Dr. Aidi Ahmi (Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia) adopt qualitative research methodology based on in-depth interviews with experts from two prominent anti-corruption agencies to examine the efficacy of the technique. Data collected were manually coded and analysed using thematic analysis. Through rigorous within the case and cross-case analyses of the 24 interviews conducted, two themes emerged as the findings to the study. Forensic accounting is considered an appropriate technique for adequately investigating public sector corruption and at the same is suitable for court purposes in the prosecution and conviction of corrupt officers. Finally, the study recognises the need to enhance the capacity of the investigators through training and retraining as well as through the provision of the latest equipment for fighting corruption.
In the second paper with a title “Internal Audit Functions: An empirical study of Public and Private Sectors in Nigeria”, Mr. Abdulkadir Madawaki (Department of Accounting, Al-Qalam University Katsina, Nigeria), Dr. Aidi Ahmi (Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia) and Dr. Halimah @ Nasibah Ahmad (Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia) examine the similarities and differences between the public and private sectors internal audit functions in Nigeria. The features examined include the hierarchical position of the internal audit functions, outsourcing of internal audit activities, reporting relationship of the internal auditor, and the coordination between internal and external auditors. A survey of internal audit managers of both sectors was undertaken to establish their current practices. The results revealed that there are no much differences in the hierarchical positioning of the internal audit function in both sectors. A substantial difference was found in the reporting lines of internal auditors in both sectors. The results further showed that private sector outsources internal audit activities more than the public sector and a slight difference exists between the two sectors about the level of coordination between internal and external auditors. Finally, the result indicated that private sector experience a reduction in external audit fees compares to its counterpart in the public sector.
In the third paper entitled “The moderating effect of working capital management on the relationship between working capital determinants and firm performance”, Dr. Ahmad Rizal Mazlan (School of Economics, Finance and Banking, Universiti Utara Malaysia) and Dr. Choong Yuen Leng (Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia) examine working capital management moderating role on the relationship between the critical determinants of working capital and firm performance among 282 public-listed manufacturing firms in Malaysia for the period of 2010 to 2014. In this study, working capital management components are categorized into working capital requirement and net liquid balance. The evidence suggests that the relationship between critical determinants of working capital and firm performance is moderated by both working capital requirement and net liquid balance. Further, the results show that the research framework does form a contemporary working capital management model.
In the fourth paper captioned “Firm Performance, Ownership Structure, and CEO Selection: The Case of Nigeria”, Yahya Uthman Abdullahi (Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia), Dr. Rokiah Ishak (Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia), and Dr. Norfaiezah Sawandi (Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia) examine the effect of ownership structures, corporate performance and board political connectedness on CEO selection. The sample of the study is all Nigerian non-financial firms from the year 2011 to 2015, and consisting of 72 CEO selection events. This study uses logistic regression analysis to provide evidence that firms dominated with blockholder ownership favour external successors while managerial ownership-controlled firms are inclined to select internal candidates as successors. However, this study fails to support the argument that corporate performance and board political connectedness do influence the choice of CEO selection in the Nigerian public listed companies. In sum, the findings suggest that blockholders and managerial ownership significantly influence the choice of the origin of the successor CEOs in the Nigerian corporate landscape. This paper enriches the literature about CEO selection choices in developing economies with weak corporate governance structure like Nigeria. In addition, the findings from this study could be of immense benefit to the shareholders and corporate board members in deciding on recruiting their CEOs; and the regulatory agencies in the formulation and enforcement of reforms that guarantee good corporate practices by the boards
In the fifth paper with the title “The impact of Audit Committee, Firm Size, Profitability, and Leverage on Income Smoothing”, Dr. Veronica Indrawan (Tarumanagara University, Tanjung Duren Utara, Indonesia), Prof. Dr. Sukrisno Agoes (Tarumanagara University, Tanjung Duren Utara, Indonesia), Dr. Hisar Pangaribuan (Adventist University of Indonesia, Bandung, Indonesia), and Dr. Oluwatoyin Muse Johnson Popoola (Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia) examine the impact of the audit committee, firm size, profitability, and leverage on income smoothing in manufacturing companies listed in Indonesia stock exchange for the period of 2013-2015. Regression statistics are employed to analyse the secondary source of data collected from the annual report of the companies. Measurement of income smoothing is proxied by discretionary accruals. The results reveal that the firm size has a direct positive influence on income smoothing in the listed manufacturing companies in Indonesia. In essence, the more significant a firm size, the more actively performed income smoothing practices. In contrast, profitability indicates an adverse effect on income smoothing in the listed manufacturing companies. The adverse effect indicates that the higher the profit generated, the lesser the income smoothing practices performed. Similarly, leverage posits an adverse effect on income smoothing in the manufacturing sector. This indicates the smaller the risk of companies debt, the more exceptional the practice of income smoothing occurs. The audit committee size similarly shows a negative influence on income smoothing in the listed manufacturing companies. This finding indicates the larger audit committee size, the smaller practice of income smoothing. This occurs because the audit committee oversight function on financial reporting is more efficiently performed. The result of this research shows the contribution to theory, practice, and method, especially in developing countries
As you read through this Volume 2 Issue 1, the success of IPJAF depends on your active participation and those of your colleagues and friends through submission of high-quality articles within the journal scope for review and publication.
I cherish your continuous support in our quest to make IPJAF the most authoritative journal on accounting and finance for the community of academic, professional, industry, society and government.
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Manjunath, T. C., Pavithra G., Ravi Rayappa, Rajasekhar Koyyeda, Satvik M. Kusagur, Praveen N., Gopalaiah Gopalaiah, Arun Kumar G., and Spoorthi Jainar. "Fuzzy Logic Based Controller Design for a Typical Industrial Application Problem." Journal of Electronic Design Engineering 6, no. 3 (February 19, 2021): 16–19. http://dx.doi.org/10.46610/joede.2020.v06i03.003.
Повний текст джерелаАнотація:
In this paper, the fuzzy logic-based controller design for a typical industrial application problem is presented in brief with the hardwired model of the designed unit. This paper includes the plan and execution of mechanized clothing in a firm. The clothing has a washtub having a limit of around 60 kgs. The plan consolidates exceptional equipment to peruse the information from sensors in the tub like-the cleanser ought to be added relying upon the soil and the heaviness of the garments detected from the tub; relying upon the heaviness of the material to be washed, the water must come in through the gulf consequently; the number of wash-cycles will likewise rely upon the earth and the weight; The earth level should be checked toward the finish of each cycle and if the soil is under an ideal worth the cycle should be ended naturally. A PC is to be utilized to play out the different figurings and to control and screen all the phases of the venture. The product is composed to computerize the activity utilizing the idea of fluffy rationale.
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Villani, Davide. "The Rise of Corporate Net Lending Among G7 Countries: A Firm-Level Analysis." Review of Political Economy 33, no. 2 (January 12, 2021): 212–35. http://dx.doi.org/10.1080/09538259.2020.1860305.
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Swenson, Deborah L. "Trade Environment Changes and the Expansion of Private Chinese Exports." Asian Economic Papers 12, no. 1 (January 2013): 108–34. http://dx.doi.org/10.1162/asep_a_00192.
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This paper examines how changes in China's trade environment contributed to the rise in private firm exports. Data from 1997 to 2009 reveal that both increased exposure to multinational firm exports in related industries and expansion in private firm imports at the broad industry level contributed to private firm export growth. The benefits of multinational exposure are particularly strong for consumer goods, and the benefits of private firm provincial imports are most strongly linked to private firm exports of capital goods and intermediate inputs. In contrast, special economic zones and technology zones did not increase private firm exports. Further investigation of the export transaction data at the product level suggest that Chinese private firm export capability was increased by (1) improvements in product quality that was fostered by proximity to multinational firms; and (2) improved access to imported intermediate inputs.
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Singhania, Monica, Navendu Sharma, Rohit J. Yagnesh, and Nimit Mehra. "Hero cycles: operating breakevens." Emerald Emerging Markets Case Studies 4, no. 2 (March 5, 2014): 1–8. http://dx.doi.org/10.1108/eemcs-2014-4444.
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Subject area Bicycle industry, emerging markets, competitor analysis, financial forecasting. Study level/applicability This case can be used as a teaching tool in the following courses: MBA/post-graduate programs in management in management accounting, management control systems and strategic cost management; executive training programs for middle and senior level employees; and under-graduate/post-graduate programs in entrepreneurship. It can be used to explain and test the concepts of SWOT analysis, Porter's five forces model and PEST analysis. It introduces the technique of breakeven analysis and its relationship with operating leverage. Moreover, it demonstrates the application and analyses of the Du Pont equation. Case overview Hero Cycles Ltd was established by the four Munjal brothers in pre-independence India. It started off as a business of bicycle spare parts, but quickly expanded in post-independence India, with Ludhiana as its base. The company later joined with foreign firms like Honda Motors, Japan to become the largest manufacturers of bicycles in the world. It dominates domestic markets with a market share of around 40 percent. Ananth Munjal, a learned, ambitious and cautious individual, is the next generation, ready to take over the reins of the company. Being someone who believes in learning from past mistakes, he forms a team to critically examine the decisions made by his predecessors. This team is also directed to utilize forecasting techniques for determining the expected profitability given the existing state of affairs that prevail. Additionally, Du Pont analysis is to be performed for studying the efficiency of the company on the facets of operating performance, asset turnover and associated financial leverage. Also, Ananth's risk-averse nature compels him to study the past with regard to the relationship between operating leverage, breakeven sales and corresponding margin of safety. Furthermore, he wishes to inspect the historical cost structure of the firm, and its influence on company performance. Expected learning outcomes These include the use of: SWOT analysis to identify the strengths, weaknesses, opportunities and threats to a company; PEST analysis to identify the political, economic, social and technological factors that affect the operations of a company; Porter's five forces model to analyse an industry. The case also helps students: by identifying fixed costs and variable costs that are a part of operating expenditure of a business; in the use of forecasting the financials of a company for the sake of predicting the future outcomes of certain business strategies; by application of Du Pont analysis to examine the efficiency of the various processes and strategies; in determining quantitative terms like contribution margin, breakeven sales, operating leverage, margin of safety, their significance, and the relationship between these terms. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
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PONTUSSON, JONAS, and PETER SWENSON. "Labor Markets, Production Strategies, and Wage Bargaining Institutions." Comparative Political Studies 29, no. 2 (April 1996): 223–50. http://dx.doi.org/10.1177/0010414096029002004.
Повний текст джерелаАнотація:
Transformed patterns of labor market governance occupy a central place in the study of contemporary West European political economies. Here, detailed analysis of the dramatic decentralization of wage bargaining in Sweden identifies organized employers, especially engineering employers, as the decisive agents of institutional change. We argue that the employer offensive should be understood as a response to a shift in power within old wage-bargaining institutions, introducing invasive regulation of firm-level pay practices and, at the same time, as a consequence of new flexibility-centered production strategies, giving rise to demands for more firm-level autonomy in wage bargaining. The exceptional features of the old Swedish bargaining and the particular needs of different sectors come into play as we seek to explain the mixed pattern of wage-bargaining changes across Western Europe.
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Chauffour, Jean-Pierre, and Jose L. Diaz-Sanchez. "Tackling market distortions to rise productivity: a study using firm-level manufacturing sector data from Morocco." Middle East Development Journal 13, no. 1 (January 2, 2021): 172–90. http://dx.doi.org/10.1080/17938120.2021.1898230.
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Lam, Son K., Stefan Sleep, Thorsten Hennig-Thurau, Shrihari Sridhar, and Alok R. Saboo. "Leveraging Frontline Employees’ Small Data and Firm-Level Big Data in Frontline Management." Journal of Service Research 20, no. 1 (November 18, 2016): 12–28. http://dx.doi.org/10.1177/1094670516679271.
Повний текст джерелаАнотація:
The advent of new forms of data, modern technology, and advanced data analytics offer service providers both opportunities and risks. This article builds on the phenomenon of big data and offers an integrative conceptual framework that captures not only the benefits but also the costs of big data for managing the frontline employee (FLE)-customer interaction. Along the positive path, the framework explains how the “3Vs” of big data (volume, velocity, and variety) have the potential to improve service quality and reduce service costs by influencing big data value and organizational change at the firm and FLE levels. However, the 3Vs of big data also increase big data veracity, which casts doubt about the value of big data. The authors further propose that because of heterogeneity in big data absorptive capacities at the firm level, the costs of adopting big data in FLE management may outweigh the benefits. Finally, while FLEs can benefit from big data, extracting knowledge from such data does not discount knowledge derived from FLEs’ small data. Rather, combining and integrating the firm’s big data with FLEs’ small data are crucial to absorbing and applying big data knowledge. An agenda for future research concludes.