State ownership and early internationalization of Chinese firms: the moderating roles of firm size and the proportion of SOEs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qunyong Xie
Keyword(s):  
Firm Size ◽  
Interaction Effect ◽  
Emerging Market ◽  
Interaction Effects ◽  
State Ownership ◽  
Least Square ◽  
Content Type ◽  
Early Internationalization ◽  
Emerging Market Firms ◽  
The Impact

PurposeApplying the institution-based view and the resource-based view, this study explores how state ownership influences early internationalization of emerging market firms, how it interacts with firm size to have an impact and how the proportion of SOEs moderates this interaction effect.Design/methodology/approachBased on a sample of 717 Chinese listed firms, this study uses Poisson regression, ordinary least square regression and Heckman two-stage estimation to analyze the data.FindingsThis study finds state ownership does not influence early internationalization, state ownership and firm size jointly can have a significant impact, and the proportion of SOEs in an industry sector can moderate this interaction effect.Originality/valueThis study enriches our understanding of the impact of home government involvement on internationalization strategies of emerging market firms, contributes to early internationalization research by building the theoretical mechanisms about these direct and interaction effects and by providing empirical results and provides important advices to firm decision-makers and government policymakers. By examining these interaction effects, it also provides a solution to the theoretical conflict created by the two opposing effects of state ownership.

Financial reporting quality, family ownership, and investment efficiency

2019 ◽  
Vol 45 (4) ◽  
pp. 513-535 ◽  
Author(s):  
Faisal Shahzad ◽  
Ijaz Ur Rehman ◽  
Sisira Colombage ◽  
Faisal Nawaz
Keyword(s):  
Financial Reporting ◽  
Family Firms ◽  
Emerging Market ◽  
Reporting Quality ◽  
Least Square ◽  
Financial Reporting Quality ◽  
Family Ownership ◽  
Investment Efficiency ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to empirically investigate the impact of two monitoring mechanisms: family ownership (FO) and financial reporting quality (FRQ) on investment efficiency (IE) over the period of 2007–2014 for listed firms on the Pakistan Stock Exchange. Design/methodology/approach The authors employ two-dimensional pooled OLS cluster at the firm and year level, two-stage least square regression and feasible generalized lease square regression regression methods. Findings The findings suggest that higher FRQ and FO are associated with higher IE. Further, the authors report that higher FRQ and FO mitigate over- and under-investment. The impact of FRQ on IE is stronger (weaker) for family-controlled businesses. The results for these particular estimates are robust for alternative estimation techniques and measures of FRQ and FO. Originality/value The study draws on both agency and behavioral agency theories and therefore contributes to the literature in the following ways. First, the authors examine a relationship between FRQ and IE. Second, the authors test the impact of FO on IE. Third, the authors test the moderating impact of FO on the relationship between FRQ and the IE of family and non-family firms in relatively less regulated emerging market.

Strategic change: the impact of senior foreign managers, firm size and uncertainty avoidance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kiattichai Kalasin
Keyword(s):  
Firm Size ◽  
Strategic Change ◽  
Emerging Market ◽  
Top Management Team ◽  
Uncertainty Avoidance ◽  
Management Team ◽  
Top Management ◽  
Content Type ◽  
Focal Firm ◽  
The Impact

Purpose This study aims to examine how senior foreign executives in a top management team catalyse strategic change in firms that originated from emerging markets (EMs). It further examines the moderating effects of organisational size and uncertainty avoidance (UA) on the positive relationship between senior foreign manager and strategic change in an organisation. Design/methodology/approach The panel data econometrics and multilevel analyses were adopted to run the model. The author tests hypotheses on 263 emerging market firms (EMFs), originating from nine EMs. Findings Empirical results reveal that senior foreign managers are active agents who can promote and implement strategic change in an organisation. They possess a different set of values, knowledge and experiences that can trigger strategic change. In addition, firm size and UA weaken the relationship between senior foreign manager ratio and strategic change of a firm.. Practical implications This study indicates that recruiting committees of EMFs should consider hiring senior foreign managers to foster a higher degree of strategic change. Nevertheless, firm size and UA may impose implementation difficulties for senior, foreign managers. As a result, the focal firm should be flexible and open to change. Originality/value This study aims to contribute to strategic change and top management team internationalisation literature by promoting the role of senior foreign managers and national culture on strategic change.

Risk disclosures and firm value: the role of governance in an emerging market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Surbhi Jain ◽  
Mehul Raithatha
Keyword(s):  
Firm Value ◽  
Good Governance ◽  
Negative Impact ◽  
Emerging Market ◽  
Moderating Effect ◽  
Least Square ◽  
Governance Mechanism ◽  
Content Type ◽  
Risk Disclosures ◽  
The Impact

PurposeThe objective of this paper is to investigate the impact of risk disclosures on firm value. We further investigate whether effective governance moderates the relation between risk disclosures and firm value.Design/methodology/approachWe use a sample of the top 200 Indian listed firms on NSE from 2013 to 2018. The generalised method of moments (GMM) along with the ordinary least square (OLS) is used to investigate our research problem. Further, we use the Propensity Score Matching (PSM) technique and the Heckman selection model for correcting selection bias in the robustness section.FindingsWe find that higher risk disclosures result in lower firm value. Besides, we show that better governance minimizes the negative impact of risk disclosures on firm value. This finding encourages firms to have a good governance mechanism to mitigate the adverse effects of risk disclosures in public.Originality/valueThe main contribution of our paper is to examine the moderating effect of governance between risk disclosures in the annual report and firm value (market-based and accounting-based) in the context of an emerging economy. Moreover, the paper highlights the potential moderating effect of independent directors and resourceful boards on the risk disclosures and firm value in the Indian context.

How does home government influence the internationalization of emerging market firms? The mediating role of strategic intents to internationalize

2019 ◽  
Vol 14 (1) ◽  
pp. 187-206 ◽  
Author(s):  
Fernando Angulo-Ruiz ◽  
Albena Pergelova ◽  
William X. Wei
Keyword(s):  
Emerging Market ◽  
State Ownership ◽  
Government Policies ◽  
Asia Pacific ◽  
Government Ownership ◽  
Differential Impact ◽  
Content Type ◽  
Mediating Role ◽  
Emerging Market Firms

Purpose The purpose of this paper is to focus on the differential impact of government promotional measures and government ownership on two internationalization variables: location and speed of internationalization of emerging market multinationals (EMNEs). Central to the authors’ study is the mediating role of strategic intents to internationalize. In particular, we study how government impacts the resource-seeking, market-seeking and technology-seeking motives to internationalize. Design/methodology/approach The empirical setting for the paper is Chinese companies that have internationalized via an equity based entry mode. The authors employ 672 firm responses collected by the Asia Pacific Foundation of Canada and the China Council for the Promotion of International Trade. Findings The empirical results demonstrate that different home government measures have differential impact on internationalization outcomes. Government promotional measures (such as direct incentives and bilateral agreements to support internationalization) have only an indirect effect on international location and speed through the effect they have on the strategic motives to internationalize; while government ownership in the company has a direct impact on international location. Research limitations/implications The study highlights that home governments are shaping EMNEs strategic intent. Home government can influence EMNEs internationalization choices by providing resource flows through financial resources and state ownership or through asset-accumulation mechanisms via promotional measures. Practical implications Policy makers in emerging markets need to develop policies focused on the specific motivations that firms have when internationalizing. EMNEs are suggested to take advantage of government policies more intentionally. Originality/value The theoretical contribution centers on identifying important mediating mechanisms pointing to the interplay between government policies and international location and speed of firms. The authors contribute to the growing stream of research on internationalization of emerging market firms by building a sound theoretical model and examining empirically the role of home government in the internationalization of EMNEs.

Energy access and foreign direct investment in an emerging market: the Ghanaian perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ebenezer Bugri Anarfo ◽  
Abel Mawuko Agoba ◽  
Yakubu Awudu Sare ◽  
Daniel Komla Gameti
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Practical Implication ◽  
Emerging Market ◽  
Least Square ◽  
Energy Access ◽  
Macroeconomic Factors ◽  
Fdi Inflows ◽  
Content Type ◽  
The Impact

Purpose This study aims to investigate the impact of energy access on foreign direct investment (FDI) in an emerging market. Design/methodology/approach The study uses the two-stage least square instrumental variables estimation approach to compute the parameters of the model to account for any potential endogeneity and time persistence in energy access. Findings The results show that energy access significantly influences FDI inflows in Ghana. The results of the study also revealed that natural resources and macroeconomic variables such as real interest rate, gross domestic product growth rate are significant determinants of FDI inflows in Ghana. Practical implications The practical implication of this study is that there is a need for energy sector policy reforms in Ghana that would guarantee a secured and continued supply of energy to enhance energy access to boost FDI. Ghana should aim for a cost-effective, stable and environmentally friendly source of energy as an alternative to hydro energy as the main source of its power generation to promote FDI. Also, Ghana should initiate and implement policies aimed at creating an enabling and stable macroeconomic environment, as macroeconomic factors in this study are found to be drivers of FDI. Originality/value This study provides firsthand information on energy access and FDI from the Ghanaian perspective.

Family and state ownership, internationalization and corporate board-gender diversity

2017 ◽  
Vol 24 (2) ◽  
pp. 251-270 ◽  
Author(s):  
Abubakr Saeed ◽  
Amna Yousaf ◽  
Jaithen Alharbi
Keyword(s):  
Emerging Economies ◽  
Emerging Market ◽  
Gender Diversity ◽  
Negative Relationship ◽  
State Ownership ◽  
Women Directors ◽  
Data Set ◽  
Content Type ◽  
Emerging Market Firms ◽  
Board Gender Diversity

Purpose In times of vivid debates on the inclusion of women on boards, the purpose of this paper is to shed a new light on the composition of boardrooms in emerging market firms by investigating how family and state ownership affect board-gender diversity in the emerging economies. Design/methodology/approach This study uses Tobit regression to examine the effect of firm ownership on board-gender diversity. A panel data set of Chinese and Indian firms for the period 2004-2013 is used to conduct this study. Findings The results show a negative and significant impact of family and state ownership on the proportion of women directors. However, this relationship is seen to be reverse if the firm is operating in international markets. Notably, a negative relationship was seen to persist between ownership structure and board-gender diversity for both female executive and independent board members, whereas a positive impact of internationalization was observed only for independent female directors. Originality/value This research addresses the board-gender diversity issue in emerging economies by focusing on firm characteristics which are unique to their business context. Further, this study identifies the conditions under which emerging market firms assimilate or proscribe women on their boards by recognizing the salient features of firms from emerging markets. Hence, in doing so, new evidence is added to the studies on the determinants of board-gender diversity. Lastly, it advances the earlier literature based on resource dependency and agency views and demonstrates the importance of internationalization for the inclusion of women on corporate boards.

Do cross-border acquisitions involving emerging market firms create value

2014 ◽  
Vol 52 (8) ◽  
pp. 1451-1473 ◽  
Author(s):  
P.C. Narayan ◽  
M. Thenmozhi
Keyword(s):  
Emerging Markets ◽  
Value Creation ◽  
Emerging Market ◽  
Operating Performance ◽  
Relative Size ◽  
Rank Test ◽  
Content Type ◽  
Cross Border ◽  
Emerging Market Firms ◽  
The Impact

Purpose – The purpose of this paper is to contribute to M&A literature by explicitly investigating whether cross-border acquisitions involving emerging markets, either as acquirers or as targets, create value and how is the performance outcome in such acquisitions impacted by deal-specific characteristics. Design/methodology/approach – This study uses industry-adjusted operating performance to measure acquisition gains, the Wilcoxon signed rank test to examine value creation potential and OLS regression to evaluate the impact of deal characteristics on acquisition gains. Findings – The authors find very pronounced value destruction when emerging market firms acquire targets in developed markets, the adverse outcome being further aggravated when the mode of acquisition is “tender offer” rather than a “negotiated deal”. On the other hand, when developed market firms acquire targets from emerging markets, there is an even chance of value creation, the outcome being favourably influenced by the pre-acquisition performance of the two firms, relative size of the target and cash (not stock-swap) as the mode of payment. Originality/value – The findings from this paper offer an important, statistically significant explanation on the value creation potential and the impact of deal characteristics on post-acquisition operating performance in cross-border acquisitions involving emerging market firms. This finding assumes immense significance, given the rapidly changing landscape of global M&A, witnessed through a continuous rise in the volume and value of cross-border acquisitions involving emerging market firms.

An investigation into the effect of surplus free cash flow, corporate governance and firm size on earnings predictability

2014 ◽  
Vol 22 (2) ◽  
pp. 118-133 ◽  
Author(s):  
Redhwan Ahmed AL-Dhamari ◽  
Ku Nor Izah Ku Ismail
Keyword(s):  
Corporate Governance ◽  
Cash Flow ◽  
Firm Size ◽  
Negative Impact ◽  
Governance Structure ◽  
Free Cash Flow ◽  
Least Square ◽  
Content Type ◽  
Earnings Predictability ◽  
The Impact

Purpose – Existing studies on corporate governance mainly focus on how a strong governance system enhances the valuation of firms with cash holding or free cash flow agency problem. The aims of this paper are threefold. First, it investigates the impact of surplus free cash flows (SFCF) on earnings predictability. Second, it investigates whether corporate governance variables moderate the negative impact of SFCF on earnings predictability. Finally, this study examines whether the ability of corporate governance to mitigate SFCF and improve the predictive value of earnings varies between large and small firms. Design/methodology/approach – This paper uses heteroskedasticity-corrected least square regressions upon a sample of Malaysian listed firms. Findings – This paper finds that firms with high SFCF experience less earnings predictability. It also indicates that earnings of firms with high SFCF are more predictable when institutional investors hold a large stake of shares and when a chairperson is independent. Finally, this paper reveals that the role of institutional and managerial ownership in mitigating agency conflict of free cash flow and improving earnings predictability is more prominent in larger firms. This study implies that investors still have reservations about the ability of boards to enhance earnings numbers in Malaysia, although efforts were taken to reform the corporate governance mechanisms following the Asian financial crisis. Originality/value – This research is considered as the first attempt to examine the relationships between SFCF, corporate governance, firm size, and earnings predictability in a developing county such as Malaysia. The findings of this paper serve as a wake-up call to policy makers to evaluate the importance of governance structure in enhancing earnings predictability in emerging economies.

Enterprise resource planning and efficiency

2015 ◽  
Vol 41 (4) ◽  
pp. 405-415 ◽  
Author(s):  
Jonghyun Park ◽  
Jin Park
Keyword(s):  
Enterprise Resource Planning ◽  
Emerging Market ◽  
Positive Association ◽  
Resource Planning ◽  
Least Square ◽  
Scale Efficiency ◽  
Erp Implementation ◽  
Content Type ◽  
Erp System ◽  
The Impact

Purpose – The purpose of this paper is to investigate the efficiency of Korean insurers that have adopted enterprise resource planning (ERP) system to improve their efficiency. Design/methodology/approach – The study uses Data Envelopment Analysis (DEA) with several inputs and outputs to measure both technical and scale efficiency. With the efficiency measures and using the ordinary least square with the hetereoscedacity consistent standard errors, the study further investigates the factors affecting efficiency, and the association between ERP and efficiency. Findings – This study finds a strong positive association between ERP implementation and the insurers’ efficiency and profitability. However, firms may experience a decrease in efficiency and profitability during the first and second year after ERP implementation. Research limitations/implications – Although the findings of this study are consistent with extant studies, the study’s findings may lack generalizability because the samples are limited small Korean Property/Casualty (P/C) insurers. Originality/value – This study investigates the impact of ERP implementation on P/C insurers in an emerging market.

The effect of institutional transition on entrepreneurial orientation of family businesses

2018 ◽  
Vol 26 (1) ◽  
pp. 76-97
Author(s):  
Amit Baran Chakrabarti ◽  
Arindam Mondal
Keyword(s):  
Family Business ◽  
Entrepreneurial Orientation ◽  
Family Firms ◽  
Emerging Market ◽  
Family Businesses ◽  
Least Square ◽  
Family Ownership ◽  
Content Type ◽  
Institutional Transition ◽  
The Impact

Purpose The purpose of this paper is to ascertain the impact of family ownership on the entrepreneurial orientation (EO) of firms in an emerging market and the contingencies under which it is likely to be affected. Design/methodology/approach The paper adopted a panel data multiple regression using ordinary least square methodology on a sample of 51,972 observations belonging to 12,250 firms from India. Findings The study finds that family businesses have higher EO than non-family firms. However, it is likely to be affected during institutional transition due to environmental uncertainty. Furthermore, during institutional transition, there will be differences in the EO of family business groups and stand-alone family firms due to the former’s ubiquitous network-level resource advantages. Research limitations/implications This paper contributes to the literature on family business by reconciling the positive and negative views on the effect of family ownership on EO by arguing that the risk-taking behavior of family firms is contingent on the environmental conditions and the resource position of the firm. Practical implications This study will enable managers and other stakeholders to predict the entrepreneurial attitude of family-owned firms during environmentally stable as well as turbulent times. Social implications This study highlights the implication of institutional transition through reforms on a vital part of the economy. Policy makers have to be sensitive to repercussions on family business due to environmental turbulence. Originality/value This is one of the first papers that investigate the influence of institutional transition and the resource position of Indian family firms on their EO.

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