scholarly journals Corporate governance and banking performance: the mediating role of intellectual capital among OIC countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ejaz Aslam ◽  
Razali Haron
Keyword(s):  
Corporate Governance ◽  
Intellectual Capital ◽  
Banking Industry ◽  
Generalized Method Of Moments ◽  
Islamic Banking ◽  
Governance System ◽  
Content Type ◽  
Mediating Role ◽  
The Relationship

Purpose The existing literature asserted that the Islamic banking industry progress significantly, but it has increasingly found asset deficient which assaulted the performance of Islamic banks (IBs). The aim of this study to examine the mediating role of intellectual capital (IC) on the relationship between corporate governance (CG) mechanisms and IBs performance is examined (ATO, NPM). Design/methodology/approach A panel sample of 129 IBs is drawn from the 29 organisation of Islamic cooperation (OIC) countries from 2008 to 2017. Two-step system generalized method of moments (2SYS-GMM) was used to account for the unobserved endogeneity and heteroscedasticity problem. Findings The empirical findings demonstrate that there is a significant impact of the CG mechanism on IC. Moreover, the empirical findings indicate that CG has a direct influence on banking performance but it affects indirectly through IC. IC also appears to have a mediation role in the relationship between the CG mechanism and the performance of IBs. Research limitations/implications As the empirical research on IC from CG point of view in Islamic banking is generally new in the banking literature, the output of this research will contribute to the building up of empirical framework and practices regarding IC in the Islamic banking industry by using the resource-based theory as a leading theory and agency theory as a sub theory. It is anticipated that this study provided a superior comprehensive discussion of the IC in IBs across OIC countries which discovers the CG mechanism to influence the IC to improve banking performance. Practical implications This study offers useful insights to the regulators and practitioners to draw the rules and regulations in improving the CG mechanism and the effectiveness of internal controls by acknowledging the importance of IC in Islamic banking institutions. Particularly, the findings of this study may be of benefit to bankers to efficiently use the IC as a premise to design new and creative strategies to achieve a competitive advantage in the banking industry. Originality/value The study is unique in its nature because it presents a successful model for IBs to concentrate more on the role of IC in enhancing banking performance, which might be used by the banks to rearrange the roles within CG, to place their priorities regarding the internal governance system and financial plans for competency enhancement.

Intellectual capital and business performance: the role of dimensions of absorptive capacity

2019 ◽  
Vol 21 (1) ◽  
pp. 23-39 ◽  
Author(s):  
Syed Saad Ahmed ◽  
Jia Guozhu ◽  
Shujaat Mubarik ◽  
Mumtaz Khan ◽  
Essa Khan
Keyword(s):  
Absorptive Capacity ◽  
Intellectual Capital ◽  
Business Performance ◽  
Partial Least Square ◽  
Equation Modeling ◽  
Content Type ◽  
Mediating Role ◽  
The Relationship ◽  
Realized Absorptive Capacity

Purpose The purpose of this paper is to empirically examine the mediating role of potential and realized absorptive capacity in intellectual capital (IC) and business performance. It also investigates the direct impact of the components of IC on business performance. Design/methodology/approach Partial least square-structural equation modeling (PLS-SEM) was used to assess the effect of IC dimensions on performance and to analyze the mediating role of absorptive capacity in this relationship. Data were collected from 192 managers using a survey questionnaire with Likert scale items. Findings The findings of the study show that potential absorptive capacity does not intervene in the relationship between the components of IC and those of business performance. However, realized absorptive capacity, measured as the transformation and exploitation of knowledge, played a positive mediating role in the relationship between the dimensions of IC and those of business performance. Social capital was also noted as a weak predictor of business performance, while human capital and organizational capital had a profound positive influence. Originality/value This study contributes to the literature on IC by examining the role of realized and potential absorptive capacity in the relationship between IC components and firm performance. This research also helps practitioners recognize the importance of transformation and the exploitation of knowledge for business performance.

Impact of corporate governance on capital structure: mediating role of cost of capital

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aisha Javaid ◽  
Mian Sajid Nazir ◽  
Kaneez Fatima
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Cost Of Capital ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Managerial Ownership ◽  
Content Type ◽  
Mediating Role ◽  
The Relationship

PurposeThis paper contributes to the existing literature by extending the empirical work on the relationship between corporate governance and capital structure by analyzing the mediating role of cost of capital in the non-financial firms listed on the Pakistan Stock Exchange (PSX).Design/methodology/approachThe sample for this study includes non-financial firms listed on the Pakistan Stock Exchange (formerly Karachi Stock Exchange) for the period of 2004–2016. Based on 1800 firm-year observations, three approaches of panel data analysis are applied for the step-wise analysis of the underlying study. Firstly, Pooled OLS is applied. Secondly, fixed and random effect panel regression followed by the Hausman test to check the unobservable individual heterogeneity of the data. Hausman test indicates that the fixed-effects model is the most appropriate model for the sample panel data.FindingsThe study's findings are that board size, board composition, CEO/Chair duality, institutional ownership and managerial ownership have statistically significant direct effect on the firm's financing decisions. However, CEO/Chair duality, institutional ownership and managerial ownership have significant indirect effect on firm's capital structure decisions. The interesting finding of the paper is on the evidence of mediating role of cost of capital in the nexus of corporate governance and capital structure. Moreover, some conventional determinants of capital structure, including the firm's size, asset structure of the firm, profitability, business risk and growth, are found as determinants of capital structure decisions of the firms.Research limitations/implicationsThere are a few limitations to our study which could be addressed by upcoming research. We did not include all the four mechanisms of corporate governance including board structure, audit structure, compensation structure and ownership structure. However, we used only five important attributes including board size, board composition and CEO/Chair duality form board structure, managerial ownership and institutional ownership form ownership structure of corporate governance as our explanatory variables to examine their impact on the capital structure choices of the firms. Future studies may fill this research gap by involving some other attributes of corporate governance and analyzing their effectiveness and impact on value relevant capital structure decisions. Further, due to limited time and resources, we only tested the mediating role of cost of capital, hence, future researchers can analyze the mediating and moderating roles of different variables which may influence the relationship between corporate governance and capital structure choices of the firms.Practical implicationsThe study has many valuable guidelines and practical implications for the financial managers of the corporations. Our results will facilitate the policymakers in setting their corporate governance policies and practices and making the value relevant capital structure decisions in compliance with the implications of corporate governance mechanism. In addition, our study provides the empirical evidence in accordance with the argument that good governance practices, particularly the voluntary disclosures by the firm may reduce the information asymmetry which, ultimately, reduces the agency cost and the cost of capital for the firm. However, while deciding the financial policy of the corporations, managers can use our findings in order to assess the effectiveness of corporate governance practices employed by the firm in achieving the optimal capital structure at which the weighted average cost of capital is at its minimum level.Originality/valueThis paper contributes to the literature by investigating the mediating role of the cost of capital in the relationship between corporate governance and capital structure decisions of the firms. This paper provides empirical evidence that corporate governance indirectly affects capital structure decisions through the mediating role of cost of capital.

Exploring the mediating role of intellectual capital and competitive advantage on the relation between CSR and financial performance in SMEs

2017 ◽  
Vol 13 (1) ◽  
pp. 1-23 ◽  
Author(s):  
Priyanka Jain ◽  
Vishal Vyas ◽  
Ankur Roy
Keyword(s):  
Financial Performance ◽  
Competitive Advantage ◽  
Intellectual Capital ◽  
Geographical Area ◽  
Mediating Effect ◽  
Equation Modeling ◽  
Content Type ◽  
Mediating Role ◽  
The Relationship

Purpose The relationship between corporate social responsibility (CSR) and financial performance (FP) is a much-researched topic in academic arena. Recent studies disclosed that intellectual capital (IC) significantly impacts the success and survival of organizations. Moreover, theoretical assertions confirm that competitive advantage (CA) mediates the association between IC and FP. This has opened up new dimensions for the study. Therefore, this study aims to develop a theoretical model, first, to specify these relations and, second, to explore the mediating role of IC and CA on the relation between CSR and FP in the context of small- and medium-sized enterprises (SMEs). Design/methodology/approach Hypotheses are tested through a survey conducted on 384 SMEs in Rajasthan state. A structured questionnaire having 38 variables was used, and collected data are subjected to confirmatory factor analysis. Structural equation modeling was used to validate the measurement model and to test the mediating effect. Findings The findings indicate a weak positive relation between CSR and FP. The empirical data provide supportive evidence that IC has a profound impact on CSR and FP relationship. Specifically, it was noticed that the mediating role of CA on this relationship was not as reflective as described in the literature. Research limitations/implications The limitation of this study is that it is limited to one country, more specific to one geographical area of a country; therefore, findings of the study cannot be generalized in terms of its implications to other regions and countries. Originality/value Very few empirical studies have analyzed the mediating role of IC and CA on the relationship between CSR and FP. This study is expected to enable scholars and practitioners to have a more definite and direct understanding of the implication of IC and CA in association between CSR and FP.

Corporate governance and investment efficiency in Indonesia: the moderating role of industry competition

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Irenius Dwinanto Bimo ◽  
Engelbertha Evrantine Silalahi ◽  
Ni Luh Gde Lydia Kusumadewi
Keyword(s):  
Corporate Governance ◽  
Generalized Method Of Moments ◽  
Investment Efficiency ◽  
Governance Mechanism ◽  
Content Type ◽  
Industry Competition ◽  
Corporate Governance Mechanisms ◽  
Corporate Governance Mechanism ◽  
The Relationship

Purpose This study aims to analyse the effect of corporate governance on investment efficiency and the moderating impact of industry competition on the relationship between corporate governance and investment efficiency. Design/methodology/approach The research sample includes a total of 36 publicly listed companies assessed by the Indonesian Institute for Corporate Directorship from 2012 to 2018. Testing is performed on full sample and overinvestment and underinvestment subsamples. Additional testing is further carried out using the generalized method of moments to address endogeneity problems and a robustness test is performed to assess the estimated investment efficiency. Findings Corporate governance can increase investment efficiency and the effectiveness of corporate governance is found to drop when the level of industry competition is higher. Practical implications The results of the present study corroborate the suggestion that companies need to implement corporate governance mechanisms. Furthermore, designing a corporate governance mechanism requires the scrutiny of the external environment, including industry competition. Originality/value The present study adds the profitability factor in the calculation of investment efficiency levels. This study also considers external factors that can influence the effectiveness of corporate governance in determining investment efficiency.

Audit certification, earnings management and risk governance: a moderated-mediation analysis

2020 ◽  
Vol 18 (2) ◽  
pp. 277-299
Author(s):  
Imen Fakhfakh ◽  
Anis Jarboui
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Reporting Quality ◽  
Risk Governance ◽  
Audit Risk ◽  
Content Type ◽  
Mediating Role ◽  
The Relationship ◽  
Moderating Role

Purpose The purpose of this study is to document the mediating effect of earnings management on the relation between the components of audit certification. The study is performed under different levels of corporate governance effectiveness in the Tunisian context. The main objective is to empirically examine the ability of discretionary accruals to mediate the relationship between the audit reporting quality and audit risk and to define how the levels of risk governance moderate this relation. Design/methodology/approach Structural equation modeling (SEM) approach is applied for a panel data set of 28 Tunisian companies listed in the Tunis Stock Exchange (TSE) between 2006 and 2013. Furthermore, a moderated-mediation model is developed to examine the mediating role of earnings management. This model is considered to emphasize the moderating role of corporate governance on the relationship between audit-reporting quality and audit risk. Findings The results of this study show that earnings management mediates the moderating role of corporate governance on the relationship between timely disclosure and audit risk. Thus, this investigation empirically demonstrates that risk governance moderates both the relationship between the timely disclosure and earnings management, and the relationship between earnings management and audit risk, i.e., the mediating role of earnings management varies depending on the level of risk governance. Practical implications Investors and other external users of financial statements need to care about the audit risk by the audit-reporting quality (audit accuracy and timely disclosure). Moreover, all factors that may influence the audit risk should be identified. This identification can help guide the reforms to improve the functioning of the financial market. Originality/value This study can enhance knowledge and understanding on how motivational and environment factors influence the audit risk. Using data from the Tunisian market, this work fills a research gap by examining the audit risk and identifies a new governance risk index. The specificity of the country where the study is elaborated refers to its accurate “revolutionary” transitional phase. Tunisia aims to enhance economic growth and to establish general strategic governance of the country, particularly strategic governance of companies.

Understanding self-efficacy and performance of salespersons in Islamic banking

2020 ◽  
Vol 11 (5) ◽  
pp. 973-988
Author(s):  
AbdulKader Kaakeh ◽  
M. Kabir Hassan ◽  
Stefan Van-Hemmen ◽  
Ishrat Hossain
Keyword(s):  
Self Efficacy ◽  
Structural Equation ◽  
Cognitive Theory ◽  
Equation Modeling ◽  
Islamic Banking ◽  
Content Type ◽  
Mediating Role ◽  
And Performance ◽  
The Relationship

Purpose This study aims to investigate the relationship between organization image, awareness effort, customer demandingness, self-efficacy and self-rated performance among salespersons of Islamic banking products in the UAE. It also explores the mediating role of awareness effort and self-efficacy, using a theoretical framework derived from social cognitive theory. Design/methodology/approach Data are collected by surveying salespersons in a mixed bank (a conventional bank with an Islamic banking department) in the UAE. The researcher uses structural equation modeling to analyze the data. Findings The research concludes that customer demandingness positively affects awareness effort, awareness effort positively affects self-efficacy, self-efficacy positively affects performance and image positively affects salespersons’ self-efficacy and performance. Furthermore, the study highlights the mediating role of awareness effort and self-efficacy in the model. Research limitations/implications The sample consists of 217 salespersons working in the same bank, covering three cities in the UAE. Hence, the rest of the country is not included. Practical implications The study shows the importance of awareness efforts in achieving better performance. It also demonstrates the importance of addressing customer requirements in the banking environment. Furthermore, it illuminates the role of organization image in enforcing salespersons’ self-efficacy and performance. Social implications The paper sheds a light on salespersons’ personalities and the factors that reinforce their performance and self-efficacy. Originality/value The research is an empirical study that addresses the relationship between performance, self-efficacy, image, awareness effort and customer demandingness in Islamic banking in the UAE.

Role of burnout on job level, job satisfaction, and task performance

2017 ◽  
Vol 38 (5) ◽  
pp. 630-645 ◽  
Author(s):  
Won Ho Kim ◽  
Young-An Ra ◽  
Jong Gyu Park ◽  
Bora Kwon
Keyword(s):  
Job Satisfaction ◽  
Task Performance ◽  
Organizational Context ◽  
Content Type ◽  
Job Level ◽  
Mediating Role ◽  
Final Sample ◽  
The Relationship ◽  
And Task

Purpose The purpose of this paper is to examine the mediating role of burnout (i.e. exhaustion, cynicism, professional inefficacy) in the relationship between job level and job satisfaction as well as between job level and task performance. Design/methodology/approach The final sample included 342 Korean workers from selected companies. The authors employed the Hayes (2013) PROCESS tool for analyzing the data. Findings The results showed that all three subscales of burnout (i.e. exhaustion, cynicism, professional inefficacy) mediate the relationship between job level and job satisfaction. However, only two mediators (i.e. cynicism, professional inefficacy) indicated the mediating effects on the association between job level and task performance. Originality/value This research presented the role of burnout on the relationships between job level, job satisfaction, and task performance especially in South Korean organizational context. In addition to role of burnout, findings should prove helpful in improving job satisfaction and task performance. The authors provide implications and limitations of the findings.

The dimensional linkage between public service motivation and innovative behavior in public sector institutions; the mediating role of psychological empowerment

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Asim Rafique ◽  
Yumei Hou ◽  
Muhammad Adnan Zahid Chudhery ◽  
Nida Gull ◽  
Syed Jameel Ahmed
Keyword(s):  
Public Sector ◽  
Public Service ◽  
Psychological Empowerment ◽  
Public Service Motivation ◽  
Innovative Behavior ◽  
Content Type ◽  
Mediating Role ◽  
Relationship Of ◽  
The Relationship

PurposeInnovations are imperative for organizational growth and sustainability. This study focuses on the employees' innovative behavior, a source of organizational innovations, which has received substantial attention from the researchers. Based on the psychological empowerment theory, the study exposes the effect of the various dimensions of public service motivation (PSM) on employees' innovative behavior (IB) in public sector institutions especially in the context of developing countries such as Pakistan. Moreover, the study also investigates the mediating role of psychological empowerment (PSE) between the dimensions of PSM and IB.Design/methodology/approachThis study used the cross-sectional research design. By using random sampling, the adapted survey questionnaires were used to collect data from 346 faculty members of public sector universities located in provincial capitals of Pakistan. A partial least square–structural equation modeling (PLS-SEM) tool was used to assess the proposed hypotheses through SMART-PLS software.FindingsResults revealed that attraction to policymaking (APM), compassion (COM), self-sacrifice (SS) have a significant impact on employees' PSE and their innovative behavior, while the relationship of commitment to the public interest (CPI) with PSE and IB was found insignificant. Moreover, PSE partially mediated the relationship between PSM dimensions and employees' IB.Originality/valueThere was a scarcity of research on IB especially in public sector institutions such as academia. This study theoretically contributed to the literature by providing a refined picture in assessing the proposed relationship of the constructs. This is also one of the original studies that examine the relationship between the dimensions of PSM and IB.

How does renqing influence purchase intentions in the Chinese business-to-business context?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Xun Zhang ◽  
Biao Xu ◽  
Jun Wu
Keyword(s):  
Positive Relationship ◽  
Purchase Intentions ◽  
Moderating Effect ◽  
Content Type ◽  
Mediating Role ◽  
Chinese Business ◽  
The Relationship ◽  
Business To Business ◽  
Positive Effect

Purpose This study aims to examine the relationship between renqing and purchase intentions and the mechanism of its impact in the Chinese business-to-business (B2B) context. Design/methodology/approach Renqing in China has played an important role in business relationships and has been receiving increased attention in both practice and theory. However, little is known about whether it can influence purchase intentions in a rational B2B condition. This research aims to examine the relationship between renqing and purchase intentions and the mechanism of its impact in the Chinese B2B context. Based on a survey of 1,010 industry buyers from 468 Chinese downstream buyer companies, the empirical findings indicate a positive relationship between renqing and purchase intentions and the mediating role of long-term orientation (LTO) for increasing purchase intentions. In addition, this study also finds that product involvement (PI) has a negative moderating effect on the relationship between renqing and purchase intentions, which means that renqing has a big positive effect on purchase intentions in low PI conditions. The results highlight several implications for B2B companies that sell products to Chinese enterprises. Findings The empirical findings indicate a positive relationship between renqing and purchase intentions and the mediating role of LTO for increasing purchase intentions. In addition, this study also finds that PI has a negative moderating effect on the relationship between renqing and purchase intentions, which means that renqing has a big positive effect on purchase intentions in low PI conditions. Originality/value First of all, by answering the research question, this study shows that renqing has a positive effect on purchase intentions in Chinese B2B context. Second, this study elucidates the influence mechanism of renqing on purchase intention and identifies the mediating effect of LTO and the moderating effect of PI.

Study from Korea shows strong CSR policies significantly increase job seekers' application intentions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Keyword(s):  
Real Life ◽  
Value Congruence ◽  
Job Applicants ◽  
Job Seekers ◽  
Content Type ◽  
Mediated Moderation ◽  
Mediating Role ◽  
Corporate Social ◽  
The Relationship

Purpose This study investigated how and when corporate social responsibility (CSR) fosters job seekers’ application intentions. The authors used a “mediated moderation mode” to explore the positive effect of CSR on job seekers’ intention to apply. They considered the moderating role of applicants’ calling and the mediating role of value congruence in the relationship between the person and organization. Design/methodology/approach To test their hypotheses the authors developed a questionnaire and sent it to a sample of 259 college students with a mean age of 22.67 in South Korea. All were either prospective or current job seekers and 55.2pc were female. Two scenarios were developed based on the real-life case of a well-known coffee franchise’s CSR policies. The scenarios were identical except that one had more proactive CSR policies. Findings Results showed that a company’s proactive CSR programs increase job seekers’ intention to apply, which was moderated by their “calling” for the job. The research also demonstrated that “value congruence” between the applicant and the organization fully mediated the interaction between CSR and calling. The results, the authors said, suggested that engaging in active CSR could attract job applicants, providing a potential competitive advantage. Originality/value The authors said their study contributed to the literature as it took the job seeker’s perspective whereas most previous research on calling focused on employees. They said it was the first study to empirically demonstrate the interaction between a sense of calling and CSR.

Sign in / Sign up

Export Citation Format

Share Document