An Empirical Study on Inter-Organisational Network Structures for Connected Cars

This study aimed to empirically examine whether rapid changes in the technological environment affect inter-organisational relationships. In the automotive industry, the advantage of cohesive and vertically integrated inter-organisational relationships has been pointed out conventionally. The development of connected cars, which can communicate bidirectionally with other systems outside the car, is eliciting significant changes in the traditional automotive products and the industry structure — changes generally associated with the automotive product structure moving closer to IT products. The aim was to empirically clarify what kind of network structure of inter-organisational relations firms are growing with changes in industrial structure by creating a database of actual firm behavior. The database was analyzed using the social network analysis method, and the characteristics of growing firms’ organisational network structure were extracted. Besides the traditional integrated inter-organisational relationships, the results show that there is a mixture of inter-organisational relationships with different characteristics of growth firms. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Growth Matters: Disclosure and Risk Premium

Theoretical work generally predicts a negative association between disclosure and risk premium, where additional disclosure reduces estimation risk or information asymmetry. However, empirical studies frequently report mixed results. Recent theoretical studies suggest that the association between disclosure and risk premium is not necessarily always negative, and could be positive (or less negative). For example, Dutta and Nezlobin (2017) show that disclosure can be associated with higher risk premium when conditioned on firms' growth rates. Similarly, Johnstone (2016) shows that higher signal quality can lead to higher risk premium. Motivated by these studies, we re-examine the association between disclosure and risk premium, conditional on growth. Using various proxies for risk premium, disclosure, and growth, we provide robust evidence that while the unconditional association between disclosure and risk premium is ambiguous, the conditional association is negative for lower growth firms but is less negative (or positive) for higher growth firms.

Manufacturing internationalization: from distance to proximity? A longitudinal analysis of offshoring choices

PurposeThis paper aims to offer a long-term systematic picture of the evolution of manufacturing offshoring (in terms of intensity, geography and drivers) highlighting the changes in the surrounding context and the resulting transitions points (“points in time”) that have shaped its development path.Design/methodology/approachThree statistical tools were adopted on a dataset of 644 cases. First, the authors resorted to multiple structural change tests to identify the transition points. Second, the authors explored offshoring geography by conducting a network analysis. Finally, the authors adopted gravity models to shed light on offshoring drivers.FindingsResults highlight three offshoring phases: expansion (2002–2006), reconsideration (2007–2009) and rationalization (2010 onwards). During the first phase, characterized by economic growth, firms were mainly interested in economic savings; offshoring to low-cost countries was the prevailing location strategy. Subsequently, during the economic crisis, the number of cases declined and the main drivers became market-based factors together with the research for cost savings. Finally, in the third phase, when the economy was still stagnating and new manufacturing technologies appeared, the number of offshoring cases has further decreased, and technological- and market-based factors have become the main location drivers.Originality/valueThe study is the first to adopt a systematic, empirical and quantitative approach to analyze the evolution of the manufacturing offshoring considering both the phenomenon itself and the triggering changes in the surrounding context. In doing this, the authors also tested the importance of considering the point in time in offshoring strategies.

Do Board Characteristics Matter for Growth Firms? Evidence from China

Previous research on the effect of board characteristics mostly examines established firms. This raises the question of whether the findings from the board characteristics literature are applicable to rapidly growing enterprises, as their corporate governance landscape can be very different from that in large, mature companies. Our paper extends the corporate governance literature by investigating the performance implications of board characteristics in startups using a unique set of firms: 121 startups operating in the information technology industry listed on the Growth Enterprise Market (GEM) in China. Using a firm performance indicator constructed through the factor analysis method, we find significant correlations between firm performance and board size, age structure, board meeting frequency, and board ownership of shares. Our findings contribute to the corporate governance literature by shedding new light on the performance implications of board characteristics for startups operating in fast-paced industries.

Sentiments–Risk Relationship across the Corporate Life Cycle: Evidence from an Emerging Market

The influence of market sentiments on the bankruptcy risk propensity of firms has been extensively explored in the literature. However, less attention has been paid to whether the corporate life cycle plays any role in this nexus. The purpose of this research is to unveil how the corporate bankruptcy risk propensity responds to market sentiments, and whether this sentiments–risk relationship varies over different stages of the corporate life cycle. Using a sample of 301 Pakistani non-financial listed firms for 2005–2014, we employ two-step generalized method of moments (GMM) regression estimation to address the issue of endogeneity. Empirical evidence reveals that managers tend to escalate a firm’s bankruptcy risk during high market sentiments. Further analysis indicates that during the period of positive market sentiments, introduction stage firms prefer to assume the highest bankruptcy risk followed by decline and growth firms, while mature firms continue to be risk-averse. This research contributes to the corporate finance literature by suggesting that managerial risk-taking is influenced by market sentiments and corporate managers show a different attitude towards risk at different stages of the corporate life cycle. Therefore, to ensure enterprise sustainability, capital market regulators should have a robust risk management framework in place to discipline the excessive risk-taking by firm managers over different stages of the corporate life cycle. Moreover, investors and creditors shall take into consideration the respective life cycle stage of the firm to minimize the risk exposure of their investment portfolios. Our results are robust to alternate econometric specifications and alternate variable specifications.