Is Sustainable Performance Explained by Firm Effect in Small Business?

To what extent a firm’s resources (firm effect) and the structure of the sector (industry effect) are sources of a firm’s competitiveness has been debated for years in strategic management. Most of the empirical studies carried out have focused on large firms and have used static performance measures, and in them the firm effect generally outweighs the industry effect. This research contributes to this debate in trying to verify whether the competitive advantage that relies on the firm’s resources is sustainable, especially in small firms. We used a sample of almost 15,000 Spanish firms to test the impact that the firm and the industry effects have on sustainable performance, for both small and large firms, applying hierarchical linear modelling with a variable measured through time-varying parameters. Our results confirm the absolute importance of the firm effect on sustainable organizational performance, regardless the firm size, and show that, even though the industry effect has little weight in explaining sustainability, it is significantly higher in the case of small firms. This means that managers must concentrate efforts on providing their firm with the necessary resources to achieve a competitive advantage while choosing a good sector to position itself.

Pengaruh Profitabilitas, Ukuran Perusahaan, Dan Jenis Kap Terhadap Pengungkapan Aset Biologis

This study aims to see the effect of profitability, firm size, and type of public accounting firms to biological asset disclosure. The population in this study are all agricultural companies listed on the Indonesia Stock Exchange (IDX) that is as many as 32 companies. The sample in this research use sampling technique purposive sampling counted 13 company in 2016-2018. The analysis was done by using multiple regression model. The results of this study indicate that: (1) The Profitability has no effect on the disclosure of biological asset. (2) Firm size has no effect on biological asset disclosure. (3) type of public accounting firm effect on biological asset disclosure

Impact of outward FDI on firms’ productivity over the food industry: evidence from China

Purpose The purpose of this paper is to study the impact of outward foreign direct investment (OFDI) on the productivity of parent firms over the food industry. Design/methodology/approach The main data in this paper are derived from the China Industrial Enterprise Database 2005–2013 and a data set of Chinese firms’ OFDI information. Then this paper uses propensity score matching to match the treatment and control groups with firm characteristics and combines that with the differences-in-differences method to estimate the real effect of OFDI on total factor productivity. Findings The food firm’s OFDI significantly improves the parent firm’s productivity (known as the OFDI own-firm effect), but this promotion only exists in the short term. The OFDI own-firm effect of food firms differs remarkably as the sub-sectors, regions and ownership of firms vary. The food firm’s OFDI in “non-tax havens” and high-income destinations has a significantly stronger effect on the parent firm’s productivity. FDI, R&D and exporting can effectively strengthen the OFDI own-firm effect of food firms. Originality/value The effect of OFDI on food industry productivity has not been researched yet. This paper aims to fill this gap. This paper further divides the characteristics of food firms into different sub-sectors, regions and ownership types for a comparative analysis, with the aim of conducting a more comprehensive study at the micro-level of firms. In addition, an investigation into which factors influence the degree of the OFDI own-firm effect at the micro-level has not been found in the literature. This paper will draw its own conclusions.

Idiosyncratic volatility and nominal stock prices: evidence from approximate factor structures

Approximate factor structures defined by Chamberlain and Rotschild (1983) allow to test whether a given quantitative firm characteristic (the nominal stock price in this paper) is a determinant of the idiosyncratic volatility of stock returns. Our study of 8,000 U.S stocks over the period 1980-2014 shows that small price stocks exhibit a higher idiosyncratic volatility than large price stocks. This relationship is persistent over time and robust to variations in the number of common factors of the approximate factor structure. Moreover, this small price effect does not hide a small-firm effect because it is still valid when we analyze the tercile of large firms. Our result confirms that small price stocks have lottery-type characteristics and, therefore, it is not in line with the efficient market hypothesis.