Performance feedback and firms’ relative strategic emphasis: The moderating effects of board independence and media coverage

2022 ◽  
Vol 139 ◽  
pp. 218-231
Author(s):  
Lulu Cheng ◽  
En Xie ◽  
Junyi Fang ◽  
Nan Mei
Keyword(s):  
Performance Feedback ◽  
Media Coverage ◽  
Board Independence ◽  
Moderating Effects ◽  
Strategic Emphasis

Invest in Innovation or Not? How Managerial Cognition and Attention Allocation Shape Corporate Responses to Performance Shortfalls

2021 ◽  
pp. 1-36
Author(s):  
Lerong He ◽  
Liying Huang ◽  
Guangqing Yang
Keyword(s):  
Performance Feedback ◽  
Attention Allocation ◽  
High Tech ◽  
Moderating Effects ◽  
Managerial Cognition ◽  
Industry Competition ◽  
Aspiration Levels ◽  
The Relationship ◽  
Underperforming Firms ◽  
D Investment

ABSTRACT This study investigates the influence of managerial cognition and attention allocation on firms’ responses to negative performance feedback. We explore how managerial cognition, as shaped by managers’ experiences, connections, positions, and industry environments, affects underperforming firms’ attention allocation and, consequently, their decisions to invest in innovation. Utilizing a longitudinal sample of Chinese high-tech firms from 2009 to 2017, we find that firms increase investment in research and development (R&D) when performance falls below aspiration levels. We also document that underperforming firms are associated with an even larger R&D investment increase when their CEOs have an R&D or engineering background, serve simultaneously as the board chair, or are not politically connected. In addition, we highlight the moderating effects of industry competition and industry norms on the relationship between firm underperformance and R&D intensity. We conclude that managerial cognition affects firms’ allocation of attention to innovation as a solution for closing performance gaps and shapes corporate responses to negative performance feedback.

scholarly journals How is firm performance related to family ownership in Malaysia and does board independence moderate the relationship?

2015 ◽  
Vol 11 (2) ◽  
pp. 21-35 ◽  
Author(s):  
Sin-Huei Ng ◽  
Tze San Ong ◽  
Boon Heng Teh ◽  
Wei Ni Soh
Keyword(s):  
Firm Performance ◽  
Agency Theory ◽  
Family Ownership ◽  
Board Independence ◽  
Moderating Effects ◽  
Dominant Party ◽  
The Family ◽  
And Control ◽  
Relationship Of ◽  
The Relationship

This paper explores whether the performance of publicly-listed family-controlled firms in Malaysia is related to the extent of the families’ ownership. It also explores whether there are any moderating effects from the various attributes of board independence on the ownership-performance relationship of these firms. The findings indicate that increasing families’ ownership is related to better firm performance under the condition that the families do not have absolute ownership and control over their firms. However, giving more control via majority ownership that causes the families to become the only dominant party might enhance their ability to expropriate and cause firm performance to deteriorate. Therefore, proposal to increase ownership as a mean to reduce the classical agency-theory problems should be caveated under the principal-principal perspective. It is also found that the various board independence attributes do not exhibit any moderating influence on the family ownership-firm performance relationship. This finding may indicate the powerlessness of the boards of director in Malaysia when encountered with the influential controlling families whom the directorship tenures and opportunities of the non-family directors depend on. Decisions made by the controlling families which have bearing on firm performance may not have been effectively counter checked by the boards due to the lack of truly independent nature of the boards

Performance Feedback and Firms’ Relative Strategic Emphasis

2021 ◽  
Vol 2021 (1) ◽  
pp. 12735
Author(s):  
Lulu Cheng ◽  
Nan Mei ◽  
Alex Junyi Fang ◽  
En Xie
Keyword(s):  
Performance Feedback ◽  
Strategic Emphasis

scholarly journals On the Moderating Effects of Country Governance on the Relationships between Corporate Governance and Firm Performance

2021 ◽  
Vol 14 (3) ◽  
pp. 140
Author(s):  
Chiu-Hui Wu
Keyword(s):  
Firm Performance ◽  
Rule Of Law ◽  
Performance Indicator ◽  
Positive Influence ◽  
Independent Directors ◽  
Board Independence ◽  
Moderating Effects ◽  
Ceo Duality ◽  
Positive Effects ◽  
Regulatory Quality

This study further empirically examines the influence of board independence on financial performance by using the world’s top 1000 firms. CEO duality and the percentage of independent directors are used as the indicators of board independence. Moreover, this study re-addresses the findings in the literature by giving supplement in theory and conducting tests for the influence of board independence on firm performance as well as the moderating effects of country governance, focusing on regulatory quality and rule of law, with multi-level modeling, a more sophisticated statistical approach. Four hypotheses, based on agency theory and compensation theory, were developed. The results indicated that CEO duality and the percentage of independent directors exerted, respectively, negative and positive influence on Return on Assets (ROA), a firm performance indicator. Furthermore, regulatory quality and the rule of law positively moderated the negative effects of the former and negatively moderated the positive effects of the latter. Some practical implications were discussed based on the results obtained.

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