The dilemma of winners: market power, industry competition and subsidy efficiency

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jialin Song ◽  
Yiyi Su ◽  
Taoyong Su ◽  
Luyu Wang
Keyword(s):  
Firm Performance ◽  
Market Power ◽  
Allocative Efficiency ◽  
Marginal Effect ◽  
Moderator Effect ◽  
Resource Based View ◽  
Content Type ◽  
Government Subsidies ◽  
Industry Competition ◽  
The Relationship

Purpose The purpose of this paper is, from a resource accumulation and resource allocation perspective, to examine the variant effects of government subsidies among firms with varying levels of market power and to test how industry competition moderates the relationship between market power and allocative efficiency of government subsidies. Design/methodology/approach This study explores the relationship between government subsidies and firm performance from a resource-based view. The authors study the moderating role of market power and three-way interaction between subsidy, market power and industry competition on firm performance. The authors test their hypotheses using a sample of Chinese A-share manufacturing firms from 2006–2019. The authors apply firm-level panel data regressions and conduct a series of robustness tests. The marginal effect of market power and industry competition is explored via three-way moderator effect models. Findings This study finds that government subsidies are negatively related to firm performance. Market power, on average, strengthens the negative effect of government subsidies on performance, but such a reinforcement effect is neutralized when industry competition is intense. Government subsidies are least efficiently used when firms have market power and industry competition is low. In addition, the authors use different forms of firm performance and a various of robustness tests to verify their assumptions. Originality/value This paper contributes to the literature as follows. First, the authors look into subsidy–performance problem from the perspective of the resource-based view and contribute to explaining and mitigating the divergence of current findings on the subsidy–performance relationship. Second, the authors introduce market power and industry competition as moderators to study how resource allocative efficiency affects the subsidy–performance relationship. Third, the authors propose that managerial incentives have played an important role in the allocation of government subsidies, which enriches management practices.

scholarly journals Does CEO power matter for the performance of retrenchment strategy?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rayenda Khresna Brahmana ◽  
Hui Wei You ◽  
Maria Kontesa
Keyword(s):  
Firm Performance ◽  
Agency Theory ◽  
Ceo Power ◽  
Resource Based View ◽  
Content Type ◽  
Emerging Country ◽  
The Relationship ◽  
Circulation Theory ◽  
Moderating Role

PurposeThis research aims to examine the moderating role of CEO power on the relationship between retrenchment strategy and firm performance by framing the relationship under an agency theory, and power circulation theory.Design/methodology/approachThis study focuses on a sample of 319 non-financial public listed companies in Malaysia from the year 2011–2016 and estimates the model under two-step GMM panel regression to eliminate the endogeneity issue.FindingsThe results show that the retrenchment strategy increased firm performance. Meanwhile, greater CEO power changes that retrenchment effect into increased performance. This study also indicates the CEO power strengthens the relationship between firm performance and retrenchment. However, CEO power does not have any effect on the performance of low retrenchment, and the performance of big firm size.Research limitations/implicationsThe findings show that the higher CEO power cause higher firm performance and higher retrenchment. This research suggests that CEO power can make retrenchment strategy works and the decision made can affect the firm performance significantly.Originality/valueThis study examines the effect of CEO power on the performance of retrenchment strategy implementation by contesting agency theory, power circulation theory, and resource-based view theory within the emerging country context.

Exploring the relationship between corporate entrepreneurship and firm performance: the mediating effect of strategic entrepreneurship

2020 ◽  
Vol 16 (1) ◽  
pp. 113-133
Author(s):  
Babak Ziyae ◽  
Hossein Sadeghi
Keyword(s):  
Firm Performance ◽  
Competitive Advantage ◽  
Corporate Entrepreneurship ◽  
Mediating Effect ◽  
Equation Modeling ◽  
Resource Based View ◽  
Content Type ◽  
Strategic Entrepreneurship ◽  
The Relationship ◽  
Financial Technology

PurposeStrategic entrepreneurship rejuvenates firms to achieve a competitive advantage in current markets. It is effective in forming corporate entrepreneurship and involves the simultaneous opportunity-seeking and advantage-seeking behaviors of firms. The aim of this paper is to investigate the mediating effect of strategic entrepreneurship in the relationship between corporate entrepreneurship and firm performance through the resource-based view.Design/methodology/approachAdopting a quantitative research method and structural equation modeling technique, structural models were developed to test the research hypotheses. To this end, a questionnaire survey was conducted among 103 financial technology companies in Iran.FindingsThe results support the proposed hypotheses. The findings indicate that corporate entrepreneurship and strategic entrepreneurship are positively related to firm performance. They also reveal the mediating effect of strategic entrepreneurship in the relationship between corporate entrepreneurship and firm performance. In the developing context of Iran, financial technology companies are more likely to employ corporate entrepreneurship and strategic entrepreneurship to achieve firm performance.Originality/valueThe current study contributes to the literature on strategic entrepreneurship by employing a resource-based view and exploring the relationship between firm capabilities (i.e. strategic entrepreneurship) and firm performance. Applying a resource-based view leads to a better understanding of strategic entrepreneurship. Finally, this study singles out and discusses the various features that characterize the implementation of strategic entrepreneurship by Iranian financial technology companies to reach a competitive advantage.

Does investment in innovation impact firm performance in emerging economies? An empirical investigation of the Indian food and agricultural manufacturing industry

2021 ◽  
Vol 13 (2) ◽  
pp. 233-248
Author(s):  
Manogna R.L. ◽  
Aswini Kumar Mishra
Keyword(s):  
Firm Performance ◽  
Manufacturing Industry ◽  
Emerging Market ◽  
Developed Countries ◽  
Emerging Economy ◽  
Content Type ◽  
Agricultural Industry ◽  
Indian Food ◽  
The Impact ◽  
The Relationship

Purpose The study aims to analyze the impact of Research & Development (R&D) intensity on the firm’s performance, measured by growth of sales in the emerging market like India. Innovation strategy and its outcomes for firms may be different in developing countries as compared to developed countries. Thus, a study that focuses on the emerging economy like India, with a majority of the population dependent on agriculture, is of prime importance to the firm performance in the food and agricultural manufacturing industry. For this study, the broader focus will be on one widely recognised factor which may influence the growth rate of firms, i.e. investment in innovations which is in terms of R&D expenditure. Design/methodology/approach The paper investigates the relationship between the R&D efforts and growth of firms in the Indian food and agricultural manufacturing industry during 2001–2019. To empirically test the relationship between firm’s growth (FG) and R&D investments, system generalised method of moments technique has been used, hence enabling to avoid problems related to endogeneity and simultaneity. Findings The findings reveal that investments in innovations have a positive effect on the growth of firms in the Indian food and agricultural manufacturing industry. Investment in R&D also enables the firms to reap benefits from externalities present in the industry. Further analysis reveals that younger firms grow faster when they invest in R&D. More specifically, this paper finds evidence in the case of the food and agricultural industry that import of raw materials negatively affects the FG and export intensity positively affects the growth in the case of R&D firms. Research limitations/implications This study suggests that the government should encourage the industries to invest optimally in R&D projects by providing favourable fiscal treatments and R&D subsidies which are observed to have positive effects in various developed countries. Originality/value To the best of the author’s knowledge, the current paper is the first to analyse the impact of innovation in food and agricultural industry on firm’s performance in an emerging economy context with the latest data. This paper agrees that a government initiative to increase private R&D expenditure would have favourable effects on FG as growing investments in R&D lead to further growth of the firms.

Strategic orientations, firm performance and the moderating effect of absorptive capacity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Manuel-Alejandro Ibarra-Cisneros ◽  
María del Rosario Demuner-Flores ◽  
Felipe Hernández-Perlines
Keyword(s):  
Firm Performance ◽  
Market Orientation ◽  
Absorptive Capacity ◽  
Entrepreneurial Orientation ◽  
Manufacturing Firms ◽  
Moderating Effect ◽  
Equation Modeling ◽  
Content Type ◽  
Strategic Orientations ◽  
The Relationship

PurposeThe purpose of this article is to study the moderating effect of absorptive capacity, defined as the set of organizational routines and processes through which companies acquire, assimilate, transform and exploit knowledge to produce a dynamic organizational capacity (Zahra and George, 2002), in three strategic orientations: market orientation; technology orientation and entrepreneurial orientation and their positive relationship in the performance of the medium and large Mexican manufacturing firms. Likewise, it is determined whether these three combined SOs influence firm performance.Design/methodology/approachThe data was collected from 171 medium and large-sized Mexican manufacturing firms. The proposed hypotheses are tested using partial least square structural equation modeling (PLS-SEM).FindingsDespite the importance of knowledge for the development of firms, the results indicate that the moderating effect of absorptive capacity is only present in the relationship between entrepreneurial orientation and firm performance. That is, firms cannot take advantage of knowledge simultaneously between the three strategic orientations. For their part, market orientation and entrepreneurial orientation exert a positive influence on firm performance.Practical implicationsThe main practical implication for the manufacturing industry is that they must develop mechanisms to detect what kind of knowledge affects each strategic orientation, in this way it can make the absorptive capacity influence the relationships between SO and FP.Originality/valueThe main contribution consists of studying the moderating effect of the absorptive capacity on the relationship between three strategic orientations and firm performance, and not concentrating solely on the simultaneous use of these strategies as is commonly done.

I'll manage myself: the moderator effect of positive framing on the relationship between organisational politics and engagement

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Robinson James
Keyword(s):  
Work Engagement ◽  
Structural Equation ◽  
Harmful Effect ◽  
Negative Relationship ◽  
Partial Least Square ◽  
Least Square ◽  
Moderator Effect ◽  
Content Type ◽  
The Relationship ◽  
Organisational Politics

PurposeThis study aims to investigate the influence of organisational politics on work engagement and the moderator effect of positive framing on this relationshipDesign/methodology/approachData were collected from 241 public sector employees in Sri Lanka through a structured questionnaire and analysed with partial least square structural equation modelling (PLS_SEM).FindingsThe results indicated that organisational politics negatively influenced employees' work engagement, positive framing positively influenced engagement and weakened the negative relationship between politics and engagement.Practical implicationsThis study suggests that organisation and individuals must take the necessary steps to enhance work engagement. Organisations must be transparent in all activities to avoid employees' negative perception. Also, organisations need to take steps to recruit employees with positive framing or develop this competency through training and development. Individuals also need to take necessary steps to frame the work environment positively to enhance their engagement in work.Originality/valueThis study extends the literature by being the first to examine the positive framing as a moderator in the relationship between politics and engagement. This study found that positive framing as a resource reduced the harmful effect of organisational politics on engagement and suggested positive framing can be considered as a resource in the future investigation of the job demand–resource model.

Intellectual capital in Ugandan service firms as mediator of board governance and firm performance

2014 ◽  
Vol 5 (3) ◽  
pp. 300-340 ◽  
Author(s):  
Stephen Korutaro Nkundabanyanga ◽  
Joseph M. Ntayi ◽  
Augustine Ahiauzu ◽  
Samuel K. Sejjaaka
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Predictor Variable ◽  
Mediating Effect ◽  
Board Governance ◽  
Content Type ◽  
Firm Financial Performance ◽  
Starting Point ◽  
The Relationship

Purpose – The purpose of this paper is to examine the mediating effect of intellectual capital on the relationship between board governance and perceived firm financial performance. Design/methodology/approach – This study was cross-sectional. Analyses were by SPSS and Analysis of Moment Structure on a sample of 128 firms. Findings – The mediated model provides support for the hypothesis that intellectual capital mediates the relationship between board governance and perceived firm performance. while the direct relationship between board governance and firm financial performance without the mediation effect of intellectual capital was found to be significant, this relationship becomes insignificant when mediation of intellectual capital is allowed. Thus, the entire effect does not only go through the main hypothesised predictor variable (board governance) but majorly also, through intellectual capital. Accordingly, the connection between board governance and firm financial performance is very much weakened by the presence of intellectual capital in the model – confirming that the presence of intellectual capital significantly acts as a conduit in the association between board governance and firm financial performance. Overall, 36 per cent of the variance in perceived firm performance is explained. the error variance being 64 per cent of perceived firm performance itself. Research limitations/implications – The authors surveyed directors or managers of firms and although the influence of common methods variance was minimal, the non-existence of common methods bias could not be guaranteed. Although the constructs have been defined as precisely as possible by drawing upon relevant literature and theory, the measurements used may not perfectly represent all the dimensions. For example board governance concept (used here as a behavioural concept) is very much in its infancy just as intellectual capital is. Similarly the authors have employed perceived firm financial performance as proxy for firm financial performance. The implication is that the constructs used/developed can realistically only be proxies for an underlying latent phenomenon that itself is not fully measureable. Practical implications – In considering the behavioural constructs of the board, a new integrative framework for board effectiveness is much needed as a starting point, followed by examining intellectual capital in firms whose mediating effect should formally be accounted for in the board governance – financial performance equation. Originality/value – Results add to the conceptual improvement in board governance studies and lend considerable support for the behavioural perspective in the study of boards and their firm performance improvement potential. Using qualitative factors for intellectual capital to predict the perceived firm financial performance, this study offers a unique dimension in understanding the causes of poor financial performance. It is always a sign of a maturing discipline (like corporate governance) to examine the role of a third variable in the relationship so as to make meaningful conclusions.

Corporate governance, globalization and firm performance in emerging economies

2018 ◽  
Vol 67 (8) ◽  
pp. 1310-1333 ◽  
Author(s):  
Neha Saini ◽  
Monica Singhania
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Panel Data ◽  
Foreign Capital ◽  
Good Governance ◽  
Foreign Ownership ◽  
Foreign Firms ◽  
Content Type ◽  
Governance Practices ◽  
The Relationship

PurposeThe purpose of this paper is to examine relationship between corporate governance (CG) and firm performance for a set of 255 foreign-funded firms in the form of foreign direct investment (FDI) and private equity (PE). The authors employ a wide range of CG measures including board size, meetings, board gender and foreign ownership which are used as the proxy of globalisation and control variables like firm age, leverage, firm size and capital expenditure to arrive at a conclusion.Design/methodology/approachPanel data set of 255 (187 companies funded by foreign capital in the form of FDI, and 68 companies having foreign capital in the form PE) companies listed on Bombay Stock Exchange, for the period of eight years (2008–2015) are analysed by using static (fixed and random effects) and dynamic (generalised method of moments (GMM)) panel data specifications to examine the relationship among CG, globalisation and firm performance.FindingsThe empirical results of static model indicate the relationship between CG and performance of foreign firms, which are not very strong in India. This is due to the fact that most of the firms are not following the guidelines and regulations strictly in the initial period of sample years. Diversity in board is found as an important variable in accessing firm performance. And the authors also found that foreign firms are very particular about the implementation of CG norms. The results of GMM model highlight the interaction term of foreign ownership with governance indicators. CG is having a positive and significant impact over performance, inferring that higher foreign ownership (in the form of FDI and PE) in firm leading to positive effect on profitability.Practical implicationsThe investor’s preference of financing a unit is guided by the performance of a firm. Investors are more inclined towards high-performing firms, and hence higher profitability leads to higher inflow of capital. The result indicates that higher accounting and market performance may be achieved by good governance practices, in turn, leading to reduced agency costs. Countries with high governance scores attract more of foreign capital. Similar to the best governed countries, the companies having good governance practices attract more foreign inflows in the form of capital.Originality/valueWhile previous literature considered a single measurement framework in the form of a CG index, the authors tried to incorporate a range of CG indicators to study the effect of globalisation and CG on firm performance. The authors segregated foreign-owned funds into two parts, especially FDI and PE. This paper examined heterogeneity in the form of FDI-funded and PE-funded firms, as no prior literature is available which has evaluated different sets of foreign funds simultaneously on CG.

Chasing productivity demands, worker well-being, and firm performance

2020 ◽  
Vol 49 (9) ◽  
pp. 1823-1843
Author(s):  
Mastura Ab Wahab ◽  
Ekrem Tatoglu
Keyword(s):  
Firm Performance ◽  
Well Being ◽  
Manufacturing Firms ◽  
Equation Modeling ◽  
Flexible Work Arrangements ◽  
Flexible Work ◽  
Content Type ◽  
Work Arrangements ◽  
The Impact ◽  
The Relationship

PurposeThis study aims to examine the impact of chasing productivity demands on worker well-being and firm performance in manufacturing firms in Malaysia. Flexible work arrangements and human resources support are used as moderators to mitigate the adverse impacts associated with chasing productivity demands.Design/methodology/approachData were collected from 213 workers from manufacturing firms through a survey questionnaire utilizing structural equation modeling.FindingsThe findings of the study show that flexible work arrangements play a significant role in moderating the relationship between chasing productivity demands and well-being, and between chasing productivity demands and firm performance. The study also shows that flexible work arrangements are important to buffer the adverse effects of chasing productivity demands on worker well-being. In addition, flexible work arrangements strengthen the positive effect of worker well-being on firm performance.Research limitations/implicationsThis study highlights the importance of flexible work arrangements in overcoming the negative impact of the relationship between chasing productivity demands and worker well-being and strengthening the positive impact of the relationship between worker well-being and firm performance.Originality/valueThis study has extended the variable of chasing productivity demands in the existing literature on the job demands–job control model, specifically in manufacturing firms.

Participatory HRM and firm performance

2019 ◽  
Vol 41 (5) ◽  
pp. 1098-1119 ◽  
Author(s):  
Neha Gahlawat ◽  
Subhash C. Kundu
Keyword(s):  
Firm Performance ◽  
Organizational Climate ◽  
Structural Equation ◽  
Affective Commitment ◽  
Intention To Leave ◽  
Employee Attitudes ◽  
Primary Data ◽  
Equation Modeling ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between participatory HRM and firm performance through a series of mediators. Design/methodology/approach Primary data were collected from 569 respondents belonging to 207 organizations operating in India. Structural equation modeling and bootstrapping via PROCESS were used to analyze the hypothesized relationships between participatory HRM and firm performance. Findings The study has highlighted that participatory HRM in the form of self-managed teams, flexible work arrangements and empowerment results in better organizational climate, heightened affective commitment, reduced intention to leave and enhanced firm performance. Furthermore, it has been established that organizational climate, affective commitment and intention to leave serially mediate the relationship between participatory HRM and firm performance. Practical implications The study gives strong indications that adopting bundle of participatory HRM practices is beneficial for generating positive organizational climate, enhanced employee attitudes and superior firm performance. Originality/value By establishing serial mediation through organizational climate, affective commitment and employees’ intention to leave, this study brings new insights into the interpretation of underlying mechanism existing between participatory HRM and firm performance, thus uniquely contributes to the HRM and OB literature.

Help or resistance? Product market competition and water information disclosure: evidence from China

2019 ◽  
Vol 11 (5) ◽  
pp. 933-962
Author(s):  
Zhifang Zhou ◽  
Tao Zhang ◽  
Jiachun Chen ◽  
Huixiang Zeng ◽  
Xiaohong Chen
Keyword(s):  
Information Disclosure ◽  
Market Competition ◽  
Product Market ◽  
Product Market Competition ◽  
Competition Intensity ◽  
Ownership Type ◽  
Content Type ◽  
Industry Competition ◽  
The Government ◽  
The Relationship

Purpose This paper investigates the relationship between product market competition and firms’ water information disclosure and how firms’ ownership type can affect this relationship in China, offering new insights into corporate water management. Design/methodology/approach The authors investigated 303 Chinese listed companies in highly water-sensitive industries to examine how product market competition influences corporate water information disclosure by subdividing the product market competition into market competition at the firm level and the industry competition intensity at the industry level. Findings The results show that there exists an inverted U-shaped relationship between industry competition and water information disclosure; enterprises with the highest market power in a mildly competitive industry are more willing to voluntarily disclose water information and play an industry benchmarking role. Further tests demonstrate that the relationship between industry competition intensity and water information disclosure is stronger for state-owned enterprises than for private enterprises. Research limitations/implications The current water resources regulations in China are relatively lax and the water risk awareness of firms is weak, which may affect the applicability of the results. In addition, water information disclosure research is a relatively new field and a quantitative index system for water information disclosure is still in the exploratory stage. Further developments, including the selection, definition and measuring methods of a water index are required. Practical implications The authors developed a new direction of enterprise water management activities from the perspective of market competition. Based on the market conditions in China, the authors also investigated the impact of the ownership type of the enterprises on the relationship between market competition and water information disclosure. Social implications The authors suggested that the government should improve laws and regulations and adopt incentive mechanisms to encourage enterprises to implement water resource management. In addition, the government should encourage high market status enterprises to actively fulfill their environmental responsibilities so that the entire industry is encouraged to follow suit. Originality/value This study represents an important development in the field of environmental accounting and is the first research on corporate water information disclosure; it also extends the research on the influence mechanisms of market competition on the environmental management practices of enterprises.

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