The effects of government relation and institutional environments on channel performance

2018 ◽  
Vol 30 (3) ◽  
pp. 587-604
Author(s):  
Fang Jia ◽  
Zhilin Yang ◽  
Ling (Alice) Jiang
Keyword(s):  
Firm Performance ◽  
Institutional Environment ◽  
Legal Protection ◽  
Institutional Factors ◽  
Institutional Environments ◽  
Content Type ◽  
Environment Factors ◽  
Government Relations ◽  
Government Interference ◽  
Channel Performance

PurposeThe purpose of this paper is to examine the importance of channel partners’ government relations within channel performance and explore how institutional factors interact to influence channel performance. A theoretical framework, inclusive of hypotheses, is proposed to demonstrate the interaction of government relations and institutional environments on firm performance. Drawing on an institutional perspective, this paper suggests that the effect of partner’s government relations on firm performance is moderated by institutional environment factors, such as government interference, legal protection, and the importance of guanxi.Design/methodology/approachThis study conducted a questionnaire survey and collected data from 393 Chinese manufacturer managers in China.FindingsPartner’s government relations increase focal firm’s performance and this effect is moderated by different levels of legal protection. Partner’s government relations increase firm performance only in the context of high-legal protection; whereas, when legal protection is low, partner’s government relations decrease focal firm performance. As for the interaction of institutional factors, legal protection and importance of guanxi, all three moderate the negative effect of government interference on firm performance.Originality/valueThis paper provides insights on how channel partner’s government relations, representing a key institutional capital, interact with institutional environment factors to influence channel performance.

Legal protection systems, corporate governance and firm performance: a cross-country comparison

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yosra Ghabri
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Legal System ◽  
Institutional Environment ◽  
Common Law ◽  
Investor Protection ◽  
Civil Law ◽  
Legal Protection ◽  
Content Type ◽  
Valuation Effect

Purpose This paper builds on the “Law and Finance” theory and aims to examine the effect of the legal and institutional environment on the governance–performance relationship in the context of non-US firms. More precisely, it examines whether and how the country’s legal system and the level of investor protection interact with the firm-level corporate governance and affect firm performance. Design/methodology/approach The authors used the “G-Index” governance score developed by the Governance Metrics International rating for a sample of 12,728 firm-year observations from 23 countries over the 2009–2016 period. Findings The results show that the interaction between the country-level institutions and corporate governance system significantly affect the firm performance. In particular, the findings indicate that firms operating in common law countries tend to exhibit a positive valuation effect and higher performance than firms with a comparable corporate governance level operating in civil law countries. More precisely, the authors find that in common law countries, higher investor protection with enhanced corporate governance is associated with better firm performance. However, firms operating in civil law countries with weaker investor protection and a comparable corporate governance level tend to experience a negative valuation effect. Originality/value The findings suggest that the institutional and legal environment is crucial and important in determining the value-maximizing level of good governance practices. Managers and regulators should carefully analyze the cost of these initiatives and should coordinate it with the needs of the country’s legal system. The challenge for the company will be how to adjust its corporate governance strategy according to the needs and demands of the country’s legal system in which the company operates to improve its performance. The regulators should ensure a fit between the specifics of the national legal and institutional environment and corporate governance standards and practices.

scholarly journals Institutional environment and network competence in successful SME internationalisation

2019 ◽  
Vol 36 (1) ◽  
pp. 31-55 ◽  
Author(s):  
Lasse Torkkeli ◽  
Olli Kuivalainen ◽  
Sami Saarenketo ◽  
Kaisu Puumalainen
Keyword(s):  
Dynamic Capabilities ◽  
Institutional Environment ◽  
Institutional Environments ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Content Type ◽  
International Performance ◽  
Network Competence ◽  
The Impact ◽  
Institutional Drivers

Purpose The purpose of this paper is to examine the impact of institutional environment on the international performance of small- and medium-sized enterprises (SMEs) and how this relationship is influenced by network competence. Design/methodology/approach This study uses a quantitative approach. In total, 119 internationally operating Finnish SMEs from five industry sectors are sampled via a cross-sectional survey. Data are analysed through regression modelling. Findings The international performance of SMEs is influenced directly and indirectly by institutional drivers. The results show that network competence mediates the positive relationship between institutional drivers and international performance. Research limitations/implications Network capability development can help SMEs leverage more or less favourable institutional environments for successful internationalisation. Perceived institutional drivers directly result in higher performance, but the effect can be partially mediated by dynamic capabilities. The limitations of the study include its single-country context and the cross-sectional nature of the data. Practical implications SMEs should take their home countries’ institutional environments into account, but for long-term success, they should develop the ability to manage their business networks. A conducive institutional environment may help develop competence, which in turn can enable more successful internationalisation in terms of scale, scope and satisfaction. Social implications Decision-makers may benefit from knowing that, in addition to capabilities, an institutionally conducive environment that drives domestic SMEs towards international markets may be an antecedent of successful internationalisation in the SME sector. Originality/value This is one of the few studies to illustrate how network capabilities can mediate the influence of institutional factors on entrepreneurial internationalisation. It combines institutional theory and the dynamic capabilities view to explain successful SME internationalisation.

Corporate governance and firm performance in Malaysia

2017 ◽  
Vol 17 (5) ◽  
pp. 896-912 ◽  
Author(s):  
Padmanabha Ramachandra Bhatt ◽  
R. Rathish Bhatt
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Design Methodology ◽  
Institutional Environment ◽  
Listed Companies ◽  
Resource Dependency ◽  
Government Agencies ◽  
Content Type ◽  
Corporate Governance Code ◽  
The Relationship

Purpose The purpose of this paper is to study the effect of Malaysian Code on Corporate Governance (MCCG, 2007 and 2012) on the performance of the listed companies in Malaysia. The agency theory and resource dependency theories indicate that the firms with strong corporate governance outperform firms with weaker governance. This paper explores this relationship in a developing country like Malaysia having different institutional environment compared to western countries. Design/methodology/approach The study used a sample of 113 listed companies in Malaysia. The study incorporates the endogenous relationship between corporate governance, firm performance and leverage. Findings The study analyzes how the corporate governance framework affected firm performance in Malaysia with the help of self-developed corporate governance index (MCGI). The authors’ findings show that the performance of the firm is positively and significantly related with corporate governance measured by MCGI. Secondly, corporate governance of sample firms shows marked improvements after implementation of MCCG 2012 as compared to MCCG 2007. Originality/value The findings of this paper support the agency and the resource dependency theories. The study contributes to the understanding of the relationship between the corporate governance and firm performance in emerging economy and builds a case for enforcement of strong corporate governance code by government agencies.

Crossing the threshold from founder management to professional management in Russian firms

2015 ◽  
Vol 21 (1) ◽  
pp. 76-106 ◽  
Author(s):  
Galina Shirokova ◽  
Gina Vega ◽  
Dmitri Knatko
Keyword(s):  
Emerging Markets ◽  
Institutional Environment ◽  
Negative Impact ◽  
Institutional Factors ◽  
Ceo Succession ◽  
Institutional Perspective ◽  
Data Set ◽  
Content Type ◽  
Professional Management ◽  
Organisational Factors

Purpose – The purpose of this paper is to bring together a strategic choice perspective and an institutional perspective in order to address the key research questions: how do Russian founder-CEOs perceive the institutional environment when succession issues are taken into consideration?; how do the perceived characteristics of different formal and informal institutions affect the founder-CEO’s decision to delegate authority to a professional CEO?; and what are the main barriers to founder-CEO succession in threshold firms in emerging markets such as Russia? Design/methodology/approach – Using a data set of 500 entrepreneurial companies from fast growing industries in Russia, the paper defines and studies threshold firms and analyses how various perceived characteristics of the institutional environment in emerging markets influence the likelihood of transition from founder management to professional management. Findings – Institutional factors such as poor security of property rights and dependence of the business on relationships with government officials have a negative impact on the likelihood of founder-CEO succession in threshold firms in emerging markets. At the same time, the perception of contract law as insecure increases the likelihood of transition from founder management to professional management. Originality/value – Most research on initial succession deals with internal organisational factors and does not consider external environments and their influence on founder-CEO departure and willingness to exit from company management. This study is unique in its focus on the external environment and institutional factors and their impact on management transitions in threshold firms in emerging economies.

A cross-country comparison of the relationship between ownership concentration and firm performance: does judicial system efficiency matter?

2017 ◽  
Vol 17 (2) ◽  
pp. 321-340 ◽  
Author(s):  
Luigi Lepore ◽  
Francesco Paolone ◽  
Sabrina Pisano ◽  
Federico Alvino
Keyword(s):  
Firm Performance ◽  
Ownership Structure ◽  
Investor Protection ◽  
Legal Protection ◽  
Judicial System ◽  
Ownership Concentration ◽  
System Efficiency ◽  
Content Type ◽  
Judicial Efficiency ◽  
The Relationship

Purpose The purpose of this paper is to analyze the relationship between ownership structure and firm performance, including judicial system efficiency as a moderator to investigate the joint effects of both explanatory variables. Although prior studies have considered judicial system efficiency by examining de jure investor protection, this study identifies another useful proxy and explores de facto legal protection. Design/methodology/approach Ordinary least square multiple regression models were used to examine the influence of judicial efficiency, which was measured using the disposition time (DT) and legal origin, as a moderator of the relationship between ownership concentration and firm performance for a sample of 565 non-financial companies listed in Italy, France, Germany and Spain in 2013. Findings This paper shows that de facto investor protection ensured by an efficient judicial system is relevant to the relationship between firm performance and ownership structure. As a moderator variable, DT strengthens the intensity of this relationship in countries with low judicial efficiency, showing that ownership concentration leads to a better enhancement of firm performance and is, therefore, a more efficient governance mechanism in countries in which investor protection is weak. Originality/value The evidence presented expands the understanding of the link between firm performance and ownership structure. The institutional deficiencies suggest that internal governance mechanisms may substitute for external mechanisms in facilitating efficient governance. This study corroborates policymakers’ concerns regarding the efficiency of judicial systems and their role in protecting the rights of minority shareholders. The results suggest a need for more efficient external mechanisms of investor protection to facilitate investment in equity capital. Moreover, this study shows that DT is a more accurate measure of investor protection than the traditional measure of de jure legal protection.

The role of institutional environment in building communication professionals' trust and satisfaction: a moderated multiple-mediation analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Juan Meng ◽  
Bruce K. Berger
Keyword(s):  
Mediation Analysis ◽  
Institutional Environment ◽  
Institutional Factors ◽  
Job Engagement ◽  
Mediating Effects ◽  
Multiple Mediation ◽  
Content Type ◽  
Internal Stakeholders ◽  
Satisfaction Relationship

PurposeAs an important group of internal stakeholders, communication professionals carry the responsibilities to communicate with multiple groups of audience and foster trusted and satisfied relationships, both internally and externally. However, while busy with taking care of various stakeholders, the trust–satisfaction perception of communication professionals is underrated. Therefore, this paper aims to shift the investigation of the trust–satisfaction relationship from general employees to this unique group of communicators. By incorporating three key factors in an institutional environment (i.e. job engagement, leadership performance and organizational culture and support), the authors further investigate the moderated mediating effects of those factors on the trust–satisfaction relationship.Design/methodology/approachA national online survey of communication professionals working and living in the USA was designed to test the trust–satisfaction relationship. Surveyed communication professionals were asked to evaluate their own perceptions on various institutional factors. A conceptual moderated multiple-mediation structural model was proposed and tested to identify the impact of a complicated institutional environment on the perceived trust–satisfaction relationship.FindingsResults confirmed a strong positive impact of trust in organization on communication professionals' perceived job satisfaction. Results also confirmed the mediating effects of job engagement and communication leaders' performance on such a trust–satisfaction relationship. The authors' moderated mediation analysis indicated the important role of organizational culture in this complicated institutional environment and its indirect impact on the trust–satisfaction relationship.Originality/valueThe research explored several important factors within a complicated institutional environment and their potential impact on trust–satisfaction relationship. More significantly, the authors focused on one unique group of internal stakeholders, communication professionals, by analyzing how these institutional factors affect their very own perceptions. Even though communication professionals carry the responsibilities of acting as the communication and strategy facilitators on behalf of their organization, their perceptions on trust and satisfaction are equally important and deserve more attention. Results of our research promote the understanding of the complicated mechanisms within corporate communication for an enhanced trust–satisfaction relationship between communication professionals and their organization.

The role of macroeconomic and institutional factors in creating corporate financial flexibility

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yasin Mahmood ◽  
Abdul Rashid ◽  
Faisal Rizwan ◽  
Maqsood Ahmad
Keyword(s):  
Financial Markets ◽  
Banking Sector ◽  
Institutional Environment ◽  
Equity Market ◽  
Institutional Factors ◽  
Financial Flexibility ◽  
Macroeconomic Factors ◽  
Content Type ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the role of macroeconomic factors and the institutional environment on corporate financial flexibility (FF). Most studies focus on well-developed financial markets and very little is known about corporate FF in less developed financial markets and emerging markets (Buvanendra et al., 2016). The present study contributes to filling this gap in the literature and provides a more practical and functional framework to assess the FF of firms located in emerging economies. Design/methodology/approach The study used annual data for the period from 1991 to 2018. To examine the relationship between macroeconomic indicators, institutional environment and corporate FF, hypotheses were tested using an unbalanced panel logistic regression model. Findings The paper provides empirical insights into the relationships between macroeconomic factors, institutional environment and corporate FF. The results suggest a substantial change in FF across firms. Inflation, institutional quality and banking sector development negatively affect FF, while equity market development has a significant positive impact. Gross domestic product growth was found to be an insignificant predictor of FF. Practical implications This study has practical implications for corporate finance managers, regulators and investors, who must consider the significant factors of this study when making economic decisions. Finance managers can thus make appropriate decisions regarding capital structure and FF. Regulators of the banking sector can take appropriate measures to enhance competition and increase the development of the banking sector. Further, regulators of the equity market can enhance the development of the market to enhance the supply of capital. Originality/value This study adds to the literature showing that not only firm-specific factors affect corporate FF, but country-specific macroeconomic and institutional factors also have a significant effect. It also adds to the literature in the area of corporate FF; this field is in its initial stage, even in developed countries, while, in developing countries, little work has been done.

scholarly journals Effects of institutional support on innovation and performance: roles of dysfunctional competition

2017 ◽  
Vol 117 (1) ◽  
pp. 50-67 ◽  
Author(s):  
Shanshan Zhang ◽  
Zhiqiang Wang ◽  
Xiande Zhao ◽  
Min Zhang
Keyword(s):  
Firm Performance ◽  
Institutional Environment ◽  
Institutional Support ◽  
Process Innovation ◽  
Equation Modeling ◽  
Content Type ◽  
Positive Effects ◽  
Product And Process Innovation ◽  
Product And Process ◽  
The Impact

Purpose The purpose of this paper is to empirically investigate the effects of institutional support on product and process innovation and firm performance and describe how dysfunctional competition influences relevant outcomes. Design/methodology/approach This study develops a research model based on institution-based view and tests it using structural equation modeling and empirical data collected from 300 manufacturers in China. Findings The results show that institutional support positively affects product and process innovation and firm performance. Both product and process innovation improve firm performance. The findings reveal that dysfunctional competition significantly reduces the positive effects of institutional support on product and process innovation but leaves the effects of institutional support and product and process innovation on firm performance unaffected. Originality/value This study contributes to innovation literature by providing insights into the impact of China’s institutional environment on manufacturing firms’ product and process innovation decisions. The findings also contribute to institution-based view literature by providing empirical evidence on the joint effects of institutional support and dysfunctional competition on product and process innovation and firm performance. This study can help manufacturers in China take advantage of institutional environment and adjust product and process innovation decisions accordingly.

Transactions in science in comparative perspective

2018 ◽  
pp. 52-69
Author(s):  
A. N. Oleinik
Keyword(s):  
Transaction Costs ◽  
Academic Freedom ◽  
North American ◽  
Institutional Environment ◽  
Scientific Productivity ◽  
Institutional Environments ◽  
Academic Administrator ◽  
The North ◽  
American Case ◽  
Transactional Approach

The article develops a transactional approach to studying science. Two concepts play a particularly important role: the institutional environment of science and scientific transaction. As an example, the North-American and Russian institutional environments of science are compared. It is shown that structures of scientific transactions (between peers, between the scholar and the academic administrator, between the professor and the student), transaction costs and the scope of academic freedom differ in these two cases. Transaction costs are non-zero in both cases, however. At the same time, it is hypothesized that a greater scope of academic freedom in the North American case may be a factor contributing to a higher scientific productivity.

scholarly journals Greater fit and a greater gap

2019 ◽  
Vol 26 (4) ◽  
pp. 561-594
Author(s):  
Steven A. Brieger ◽  
Dirk De Clercq ◽  
Jolanda Hessels ◽  
Christian Pfeifer
Keyword(s):  
Life Satisfaction ◽  
Institutional Environment ◽  
Entrepreneurial Activity ◽  
Worker Rights ◽  
Content Type ◽  
Person Environment Fit ◽  
High Power Distance ◽  
High Degree ◽  
The Impact ◽  
Low Uncertainty

Purpose The purpose of this paper is to understand how national institutional environments contribute to differences in life satisfaction between entrepreneurs and employees. Design/methodology/approach Leveraging person–environment fit and institutional theories and using a sample of more than 70,000 entrepreneurs and employees from 43 countries, the study investigates how the impact of entrepreneurial activity on life satisfaction differs in various environmental contexts. An entrepreneur’s life satisfaction arguably should increase when a high degree of compatibility or fit exists between his or her choice to be an entrepreneur and the informal and formal institutional environment. Findings The study finds that differences in life satisfaction between entrepreneurs and employees are larger in countries with high power distance, low uncertainty avoidance, extant entrepreneurship policies, low commercial profit taxes and low worker rights. Originality/value This study sheds new light on how entrepreneurial activity affects life satisfaction, contingent on the informal and formal institutions in a country that support entrepreneurship by its residents.

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