Should the smiling curve frown during an economic downturn to enhance firm performance?

2015 ◽  
Vol 21 (5) ◽  
pp. 573-593 ◽  
Author(s):  
Chin-jung Luan ◽  
Chengli Tien
Keyword(s):  
Firm Performance ◽  
Research And Development ◽  
Economic Downturn ◽  
Short Term ◽  
Economic Journal ◽  
The Relationship

AbstractThis study examines the efficacy of the smiling curve, and clarifies the relationship between downsizing strategies (advertising, marketing, and research and development, respectively) and firm performance specifically in an economic downturn. This study tests hypotheses using 1996–2010 data from the Taiwan Economic Journal on 436 listed Taiwanese companies. The results indicate that the benefits for firms to follow the smiling curve may not occur in the short term and that downsizing strategies may not always be the appropriate strategy to improve firm performance. During an economic downturn, downsizing strategies do not appear to enhance firm performance, that is, the smiling curve should not frown during an economic downturn to enhance firm performance.

scholarly journals The relationship of capital structure decisions with firm performance: A study of the engineering sector of Pakistan

2012 ◽  
Vol 2 (1) ◽  
pp. 245 ◽  
Author(s):  
Abdul Ghafoor Khan
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Negative Relationship ◽  
Engineering Industry ◽  
Tobin’S Q ◽  
Financial Leverage ◽  
Short Term ◽  
Tobin's Q ◽  
Relationship Of ◽  
The Relationship

Purpose: The purpose of this study is to find the relationship of capital structure decision with the performance of the firms in the developing market economies like Pakistan.Methodology: Pooled Ordinary Least Square regression was applied to 36 engineering sector firms in Pakistani market listed on the Karachi Stock Exchange (KSE) during the period 2003-2009.Findings: The results show that financial leverage measured by short term debt to total assets (STDTA) and total debt to total assets (TDTA) has a significantly negative relationship with the firm performance measured by Return on Assets (ROA), Gross Profit Margin (GM) and Tobin’s Q. The relationship between financial leverage and firm performance measured by the return on equity (ROE) is negative but insignificant. Asset size has an insignificant relationship with the firm performance measured by ROA and GM but negative and significant relationship exists with Tobin’s Q. Firms in the engineering sector of Pakistan are largely dependent on short term debt but debts are attached with strong covenants which affect the performance of the firm.Originality/Value: This is first paper to study an individual sector like engineering industry in Pakistan on the mentioned topic.

Impact of Research and Development on Firm Performance

2014 ◽  
Vol 4 (1) ◽  
pp. 357 ◽  
Author(s):  
Aimen Ghaffar ◽  
Waseem Ahmed Khan
Keyword(s):  
Firm Performance ◽  
Research And Development ◽  
Return On Assets ◽  
Return On Equity ◽  
Positive Correlation ◽  
Important Concept ◽  
Independent Variables ◽  
Earnings Per Share ◽  
The Impact ◽  
The Relationship

This study has been conducted to see the impact of research and development budget on the performance of the firms. Research and development is an increasingly important concept in order to have success in this era. The paper finds out the relationship between research and development and firm performance. Firm performance is measured through the ratios of return on assets, return on equity and the earnings per share of the firms. The data analyzed by using SPSS. Results confirmed the positive correlation between the dependent and the independent variables. Limitations of the study were shortage of time and studying of a single sector. In future, different other sectors can be studied to see the impact of research and development on their performance.

CSR portfolio characteristics and performance outcomes: examining the impacts of CSR portfolio diversity and dynamism

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kyle Turner ◽  
Craig A. Turner ◽  
William H. Heise
Keyword(s):  
Firm Performance ◽  
Dynamic Range ◽  
Performance Outcomes ◽  
Short Term ◽  
Content Type ◽  
Short And Long Term ◽  
Long Term Performance ◽  
Term Performance ◽  
The Relationship

Purpose The purpose of this paper is to introduce and test a portfolio view of a firm’s corporate social responsibility (CSR) activities. Drawing from stakeholder theory and the dynamic capabilities literature, the authors introduce CSR portfolio diversity and dynamism as key portfolio characteristics that have differential impacts across short- and long-term performance contexts. Design/methodology/approach The study draws from the Kinder, Lydenberg and Domini database to examine CSR portfolio diversity and dynamism across seven dimensions of CSR activities. The authors test the direct and indirect relationships between CSR portfolio characteristics and both short- and long-term performance outcomes to assess the opportunities and challenges associated with managing a diverse and dynamic CSR portfolio. Findings The findings suggest that a diverse portfolio of CSR activities positively impacts long-term performance; however, CSR portfolio diversity yields negative performance outcomes in the short-term. The authors also find that CSR portfolio dynamism moderates the relationship between CSR level and firm performance, such that a dynamic portfolio of CSR positively moderates the relationship between a firm’s CSR level and long-term performance; however, it negatively moderates the relationship between CSR level and short-term performance. Originality/value This study integrates insights from the literature that examine the independent effects of individual CSR activities and the broader perspective that assesses the aggregated summation of CSR activities in relation to firm performance. By taking a portfolio perspective, the present study provides a unique integration of these two research streams to examine the performance implications of engaging in a diverse and dynamic range of CSR activities.

Empirical investigation of relationship between research and development intensity and firm performance: The role of ownership structure and board structure

2019 ◽  
Vol 06 (02) ◽  
pp. 1950016
Author(s):  
Muhammad Usman Yousaf ◽  
Muhammad Kashif Khurshid ◽  
Aftab Ahmed ◽  
Muhammad Zulfiqar
Keyword(s):  
Firm Performance ◽  
Research And Development ◽  
Ownership Structure ◽  
Stock Exchange ◽  
Outcome Variable ◽  
Board Structure ◽  
Governance Mechanism ◽  
Financial Firms ◽  
The Relationship

Research and development is an emerging competitive advantage to gain maximum market share. This study is conducted to empirically investigate the relationship between research and development intensity and firm performance in selected non-financial firms listed at Pakistan Stock Exchange (PSX). Moreover, the role of ownership structure and board structure have been evaluated between predictor and outcome variable. For this purpose, 27 non-financial firms listed on PSX have been selected for the period of eight years from 2009 to 2016 and unbalanced panel data was obtained. Research and development intensity has been used as an independent variable. ROA, ROE, and TQ are used as measures of financial performance, i.e., dependent variable. Ownership concentration, institutional ownership, and managerial ownership are used as the proxies for ownership structure. Board size, board independence, and board meeting frequency are used as the proxies for board structure. Moreover, firm size, firm age and leverage have also been used as a control variables in data analysis. Based on data analyses, it is concluded that research and development intensity has a positive and significant relationship with all three proxies of firm performance, i.e., ROA, ROE and Tobin’s Q. Afterward, the researchers have investigated the moderating role of ownership structure and board structure between research and development intensity and three proxies of firm performance. It is also concluded that in general ownership structure as well as board structure are negatively moderating the relationship between research and development intensity and firm performance which raises a question mark on the effectiveness of corporate governance mechanism in terms of R&D performance.

INNOVATION & PRODUCTIVITY: INVESTIGATING EFFECTS OF OPENNESS IN SERVICES

2012 ◽  
Vol 16 (03) ◽  
pp. 1240004 ◽  
Author(s):  
ANNE-LAURE MENTION ◽  
ANNA-LEENA ASIKAINEN
Keyword(s):  
Firm Performance ◽  
Research And Development ◽  
Open Innovation ◽  
Service Sector ◽  
Labour Productivity ◽  
Innovation Process ◽  
Innovation Strategy ◽  
Short Term ◽  
Innovation Studies ◽  
Firm Cooperation

This study investigates the effects of openness on the different stages of the innovation process and further on firm performance. More specifically, it concentrates on inter-firm cooperation and information sourcing practices, which embody the implementation of an inbound open innovation strategy. Cooperation and information sourcing from market actors is contrasted with cooperation and information sourcing from competitors. To different extents, these actors may shape research and development (R&D) investments, affect success of the innovation process and contribute directly as well as through the innovation process to the labour productivity. Effects of these simultaneous practices on the innovation process are investigated in service sector firms, which have so far been largely neglected in (open) innovation studies. Results indicate that cooperation with and information sourcing from competitors positively influence innovation performance while market cooperation and information sourcing is resource-intensive and deteriorates performance on the short term.

scholarly journals Impact of CEO, Director and Executive compensation on the Firm Performance with Moderating Effect Research & Development

2021 ◽  
Vol 7 (2) ◽  
Author(s):  
Saad ur Rehman ◽  
Khalil ur Rehman ◽  
Adnan Maqbool ◽  
Shahid Hussain
Keyword(s):  
Firm Performance ◽  
Research And Development ◽  
Asian Countries ◽  
Significant Relation ◽  
Final Sample ◽  
Sample Data ◽  
Innovative Idea ◽  
Financial Firm ◽  
The Relationship ◽  
Sample Set

The aim of this article is to investigate the relationship between the CEO, Director and executives’ compensation on firm performance. Moreover research and development as moderator check the relation of R&D over firm performance and CEO, directors, executives’ compensation in an emerging Pakistan market. This research uses the GSEM approach for the problem of abnormality and homoscedastic arise the sample data collected from PSE 100 index non-financial list over the era of 2014-2019.The data collection sample from 75 non-financial firm and final sample consisted on 69 firm 6 organization exclude due to unavailability of data. This study provide the evidence that CEOs, Director, executives’ compensation have a significant relation with firm performance while, R&D show that insignificant relation with CEO/directors and Executives compensation perhaps R&D show significant relation with firm performance. This research contributed the firm with their better remuneration to the executive; CEO and director have better financial performance. Meanwhile research and development also play pivotal role toward firm performance due to their innovative idea and technique. In future other Asian countries included in the sample set like India and also some variable like CSR, Firm age, top executive education and tenure for showing the better significant results.

scholarly journals The effects of R&D intensity and internationalization on the performance of non-high-tech SMEs

2017 ◽  
Vol 36 (1) ◽  
pp. 81-103 ◽  
Author(s):  
Lucas WA Booltink ◽  
Ayse Saka-Helmhout
Keyword(s):  
Firm Performance ◽  
Research And Development ◽  
Critical Threshold ◽  
High Tech ◽  
High Tech Sector ◽  
And Performance ◽  
The Relationship ◽  
D Investment ◽  
Level Of Risk

Research and Development (R&D) investment is seen as a fundamental driver of high-tech small and medium-sized (SME) firm performance. However, the same driver may be constraining growth among non-high-tech SMEs as it increases the level of risk faced by such firms. We challenge this argument by examining the relationship between R&D intensity and performance among non-high-tech SMEs. While the size of R&D investments is, by definition, limited in the non-high-tech sector, our study shows that such investments are important for non-high-tech firms. There is, however, an inverted U-shaped relationship between R&D intensity and performance among non-high-tech SMEs. Furthermore, increased internationalization leads non-high-tech SMEs to exploit their R&D investment more effectively to enhance firm performance, provided that R&D investment levels exceed a critical threshold.

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