Media reputation: a source of banks' financial performance

2020 ◽  
Vol 38 (6) ◽  
pp. 1399-1419 ◽  
Author(s):  
Ngoc Thang Doan ◽  
Dung Phuong Hoang ◽  
Anh Hoang Thi Pham
Keyword(s):  
Risk Management ◽  
Financial Performance ◽  
Fixed Effects ◽  
Positive Impact ◽  
Institutional Setting ◽  
Content Type ◽  
Institutional Settings ◽  
Research Findings ◽  
The Media ◽  
Media Reputation

PurposeBased on the resource-based view (RBV) and the signaling theory, this paper examines the effect of media reputation on financial performance as well as the moderating role of bank characteristics (risk management and financial capacities) in this relationship, using Vietnamese commercial bank data for the period 2007–2018.Design/methodology/approachWe rely on the agenda-setting theory to measure the media reputation of banks. Return on average equity (ROE) is used as a proxy of financial performance. We regress financial performance on media reputation with fixed effects to control unobserved variables. In addition, the instrumental variable (IV) method is applied to deal with the endogeneity problem. We use the change in bank logo as an IV for media reputation.FindingsWe find that media reputation has a positive effect on financial performance. This effect becomes prominent for large banks, listed banks or banks that demonstrate good risk management capacities, and is particularly strong when we control for endogeneity bias. The effect of media reputation on financial performance is transmitted through the non-performing loan (NPL) channel.Research limitations/implicationsThe research findings further endorse the positive impact of media reputation on financial performance in the low-quality institutional settings. Moreover, these findings expand the existing knowledge regarding the relationship between media reputation and financial performance by affirming two strategies which could be used to leverage the contribution of media reputation including improving banks' risk management capacities and raising financial capital.Originality/valueThis is the first known paper to examine the effect of media reputation on financial performance in commercial banks in an underdeveloped institutional setting while exploring the moderators in this relationship. This study, therefore, provides insightful implications for different bank segments in managing NPL and taking advantage of media reputation as a potential resource of financial performance.

Does CEO power moderate the link between ESG performance and financial performance?

2019 ◽  
Vol 43 (5) ◽  
pp. 497-520 ◽  
Author(s):  
Patrick Velte
Keyword(s):  
Financial Performance ◽  
Fixed Effects ◽  
Positive Impact ◽  
Stakeholder Management ◽  
Chief Executive ◽  
Business Case ◽  
Ceo Power ◽  
Content Type ◽  
Upper Echelons Theory ◽  
Tier System

Purpose Based on stakeholder and upper echelons theory, this study aims to analyze whether the link between environmental, social and governance (ESG) performance and financial performance is moderated by chief executive officer (CEO) power. Design/methodology/approach Listed corporations with reference to the German two-tier system (HDAX and SDAX) for the business years 2010-2018 (775 firm-year observations) have been included. Fixed effects panel regression analysis was conducted to analyze the link between ESG performance (in total and its three pillars) and financial performance (ROA), with special reference to the interaction of a CEO power index. Findings While ESG performance has a positive impact on financial performance, the link is more pronounced by CEO power. Thus, in line with prior research on the one-tier system, CEO incentives can positively contribute to the CSR-business case in the German two-tier system. The results remain constant after conducting several robustness checks. Originality/value A key contribution to the empirical CSR literature can be stated, as the moderating role of CEO power in the ESG–financial performance link is rather neglected in prior studies. Thus, corporate governance and sustainability should be classified as interactive aspects for the business case of a successful stakeholder management.

scholarly journals Innovative capability, strategic goals and financial performance of SMEs in Ghana

2018 ◽  
Vol 12 (2) ◽  
pp. 238-254 ◽  
Author(s):  
Jacob Donkor ◽  
George Nana Agyekum Donkor ◽  
Collins Kankam-Kwarteng ◽  
Eunice Aidoo
Keyword(s):  
Financial Performance ◽  
Positive Impact ◽  
Innovation Capability ◽  
Content Type ◽  
Innovative Capability ◽  
Strong Positive Relationship ◽  
Innovative Capabilities ◽  
Research Findings ◽  
Strategic Goals ◽  
Innovative Capacity

Purpose This paper aims to investigate the moderating role of innovation capability and strategic goals in the financial performance of small- and medium-scale enterprises (SMEs) in Ghana. Design/methodology/approach Innovative capabilities and strategic goals in SMEs and their influence on financial performance were recognized and briefly debated according to the existing literature. Hypotheses were tested on research data on 340 SMEs in Ghana, which were conveniently selected. Finally, quantitative analysis was done, followed by a discussion of the research findings. Findings Results from the study have proved that strategic goals have a strong positive relationship with financial performance. Also, there is a strong, positive and highly significant impact innovative capacity has on financial performance. Finally, the study found that innovative capability moderates the relationship between strategic goals and financial performance. It showed that at high levels of innovative capacity, high levels of strategic goals boost financial performance massively. Research limitations/implications The findings are limited to SMEs in Ghana. Researchers should study why SMEs may not pursue any innovation capability activities as they have positive impact on their financial performance. They may also focus on strategic goals and financial performance. Practical implications The study shows a necessity for longer-term innovation perspectives and a higher level of the importance of the application and assessment of strategic goals. Business owners and caretakers need greater awareness about the importance of innovation capability and strategic goals and their influence on the overall financial performance of SMEs. This will help them to adopt right innovate procedures for their businesses. Originality/value One of few research works to examine innovation capability and strategic goals on the financial performance of SMEs in a developing country.

Income diversification and financial performance of commercial banks in Vietnam

2019 ◽  
Vol 12 (3) ◽  
pp. 185-199
Author(s):  
Hiep Ngoc Luu ◽  
Loan Quynh Thi Nguyen ◽  
Quynh Huong Vu ◽  
Le Quoc Tuan
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Fixed Effects ◽  
Positive Impact ◽  
Banking System ◽  
Foreign Banks ◽  
Annual Reports ◽  
Income Diversification ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of income diversification on the financial performance of commercial banks in Vietnam over the period 2007–2017. It then provides additional analysis to examine whether the diversification–performance nexus is conditioned upon bank experience and ownership structure. Design/methodology/approach The financial information of each bank were manually collected from bank annual reports. In the empirical model, a number of modern econometric techniques, including panel OLS with fixed effects and a two-step system GMM estimator, were utilised to achieve the research objectives. Findings The empirical results show that income diversification has a positive impact on banks’ performance. However, the effect varies across different types of banks. Specifically, the authors find that while diversification benefits state-owned and foreign banks, it exhibits a detrimental effect on the financial performance of other non-state owned domestic banks. In addition, the authors further find that the positive impact of diversification is more prominent for banks with more experience in the market. Originality/value This study is among the first to empirically investigate the relationships between income diversification and the financial performance of commercial banks in Vietnam. In this sense, the findings of this study could draw important inferences for researchers, policy makers and bank managers towards more appropriate diversification strategies, to ensure the safety and soundness of the whole banking system.

Farm wages and public works

2015 ◽  
Vol 8 (1) ◽  
pp. 19-72 ◽  
Author(s):  
Kanika Mahajan
Keyword(s):  
Theoretical Model ◽  
Wage Rate ◽  
Fixed Effects ◽  
Positive Impact ◽  
Wage Growth ◽  
State Level ◽  
Random Allocation ◽  
Farm Sector ◽  
Content Type ◽  
The Impact

Purpose – The purpose of this paper is to examine the impact of National Rural Employment Guarantee Scheme (NREGS) on farm sector wage rate. This identification strategy rests on the assumption that all districts across India would have had similar wage trends in the absence of the program. The author argues that this assumption may not be true due to non-random allocation of districts to the program’s three phases across states and different economic growth paths of the states post the implementation of NREGS. Design/methodology/approach – To control for overall macroeconomic trends, the author allows for state-level time fixed effects to capture the differences in growth trajectories across districts due to changing economic landscape in the parent-state over time. The author also estimates the expected farm sector wage growth due to the increased public work employment provision using a theoretical model. Findings – The results, contrary to the existing studies, do not find support for a significantly positive impact of NREGS treatment on private cultivation wage rate. The theoretical model also shows that an increase in public employment work days explains very little of the total growth in cultivation wage post 2004. Originality/value – This paper looks specifically at farm sector wage growth and the possible impact of NREGS on it, accounting for state specific factors in shaping farm wages. Theoretical estimates are presented to overcome econometric limitations.

Do disclosure and transparency affect bank’s financial performance?

2019 ◽  
Vol 19 (6) ◽  
pp. 1344-1361
Author(s):  
Isaiah Oino
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Financial Performance ◽  
Financial Institutions ◽  
Content Type ◽  
Loan Portfolios ◽  
Cent Level ◽  
Transparency And Disclosure ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of transparency and disclosure on the financial performance of financial institutions. The emphasis is on assessing transparency and disclosure; auditing and compliance; risk management as indicators of corporate governance; and understanding how these parameters affect bank profitability, liquidity and the quality of loan portfolios. Design/methodology/approach A sample of 20 financial institutions was selected, with ten respondents from each, yielding a total sample size of 200. Principal component analysis (PCA), with inbuilt ability to check for composite reliability, was used to obtain composite indices for the corporate governance indicators as well as the indicators of financial performance, based on a set of questions framed for each institution. Findings The analysis demonstrates that greater disclosure and transparency, improved auditing and compliance and better risk management positively affect the financial performance of financial institutions. In terms of significance, the results show that as the level of disclosure and transparency in managerial affairs increases, the performance of financial institutions – as measured in terms of the quality of loan portfolios, liquidity and profitability – increases by 0.3046, with the effect being statistically significant at the 1 per cent level. Furthermore, as the level of auditing and the degree of compliance with banking regulations increases, the financial performance of banks improves by 0.3309. Research limitations/implications This paper did not consider time series because corporate governance does not change periodically. Practical implications This paper demonstrates the importance of disclosure and transparency in managerial affairs because the performance of financial institutions, as measured in terms of loan portfolios, liquidity and profitability, increases by 0.4 when transparency and disclosure improve, with this effect being statistically significant at the 1 per cent level. Originality/value The use of primary data in assessing the impact of corporate governance on financial performance, instead of secondary data, is the primary novelty of this study. Moreover, PCA is used to assess the weight of the various parameters.

Policy and institutions facilitating entrepreneurial spin-offs: USA, Asia and Europe

2014 ◽  
Vol 3 (2) ◽  
pp. 186-196 ◽  
Author(s):  
Rosa Caiazza ◽  
David Audretsch ◽  
Tiziana Volpe ◽  
Julie Debra Singer
Keyword(s):  
Institutional Setting ◽  
Policy Debate ◽  
Content Type ◽  
Factors Affecting ◽  
Institutional Settings ◽  
The Usa ◽  
New Perspective ◽  
National Analysis ◽  
The Impact ◽  
Cross National

Purpose – Existing work documents the role that institutional setting plays in the process of spin-off creation. However, despite decades of studies, scholars have not clearly explained why some regions are more involved in spin-off activity than others. Drawing from institutional theory, the purpose of this paper is to compare different institutional settings identifying factors affecting the general environment capability to support spin-off activity of a specific region. Design/methodology/approach – The authors utilize a cross-national analysis of American, Asian, and European areas identifying factors affecting their different rate of spin-off activity. This study contributes to the policy debate concerning entrepreneurship and how best to spur spin-off activities. Findings – In this paper, the authors identify the general and specific factors that explain the cross-national diversity in spin-off creation. The authors then perform an analysis of the impact of these factors in various regions of the USA, Asia, and Europe, providing evidence for the necessity of specific combinations of these factors. Originality/value – The paper offers a new perspective on the causes of spin-offs through a cross-national analysis of many areas around the world.

The financial consequences of human capital disclosure as part of integrated reporting

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Antonio Salvi ◽  
Nicola Raimo ◽  
Felice Petruzzella ◽  
Filippo Vitolla
Keyword(s):  
Human Capital ◽  
Firm Value ◽  
Fixed Effects ◽  
Cost Of Capital ◽  
Positive Impact ◽  
Firm Risk ◽  
Integrated Reporting ◽  
Content Type ◽  
Financial Consequences ◽  
The Cost

PurposeThe purpose of this paper is to analyse the financial consequences of the level of human capital (HC) information disclosed by firms through integrated reports. Specifically, this work examines the effect of HC information on the cost of capital and firm value.Design/methodology/approachA manual content analysis is used to measure the level of HC information contained in integrated reports. A fixed-effects regression model is used to analyse 375 observations (a balanced panel of 125 firms for the period 2017–2019) and test the financial consequences of HC disclosure.FindingsThe empirical outcomes indicate that HC disclosure has a significant and negative effect on the cost of capital and a positive impact on firm value. Our results show that companies can reduce investors' perceived firm risk by improving HC disclosure, leading to a lower cost of capital. Moreover, our findings support the notion that increased levels of HC disclosure are linked to firms' improved access to external financial resources, consequently enhancing firm value.Originality/valueThis study is the first contribution to examine the financial consequences of HC disclosure and is one of the first to examine the level of HC information within integrated reports.

The impact of within-industry diversification on firm performance

2018 ◽  
Vol 13 (6) ◽  
pp. 1475-1501 ◽  
Author(s):  
Varaporn Pangboonyanon ◽  
Kiattichai Kalasin
Keyword(s):  
Financial Performance ◽  
Positive Impact ◽  
Labor Costs ◽  
Institutional Perspective ◽  
Product Lines ◽  
Content Type ◽  
Linear Pattern ◽  
Coordination Costs ◽  
Industry Diversification ◽  
The Impact

Purpose The purpose of this paper is to investigate how within-industry diversification affects the financial performance of small- and medium-sized enterprises (SMEs) in emerging markets (EMs). The authors draw on both the resource-based view and the institutional perspective and argue that within-industry diversification can enhance the financial performance of SMEs in EMs. Due to institutional voids in emerging economies, SMEs can gain additional benefits from scope economies, as well as from market returns, by filling product market voids and gaps in business ecosystems, while also enjoying low input and labor costs that reduce the coordination costs of diversification. This, in turn, enhances benefits of within-industry diversification, thereby resulting in higher financial profitability. Design/methodology/approach This study employs panel data econometrics to estimate the model. The authors test hypotheses on 195 firms, originating from five countries in Southeast Asia, during the period of 2009–2014. Findings The empirical results support the arguments. Within-industry diversification has a positive impact on the performance of SMEs in EMs. These effects become weaker when the institutional contexts are more developed. Nevertheless, such effects become stronger when SMEs in EMs are more efficient. Research limitations/implications The relationship between within-industry diversification and performance is a positive linear pattern, which differs from the pattern in advanced economies. In addition to unrelated diversification, the related diversification is preferable for firms in EMs. Practical implications The paper provides implications for SMEs that aim to enhance their performance by engaging in single product lines and within-industry diversification. Originality/value This paper examines the different ways within-industry diversification can enhance SMEs performance in EM contexts.

scholarly journals Simultaneous Association between Quality of Corporate Environmental Performance and Financial Performance: Evidence from Select Asian Countries

2020 ◽  
Vol 4 (1) ◽  
pp. 78
Author(s):  
Santi Gopal Maji ◽  
Utpal Kumar De ◽  
Ardi Gunardi
Keyword(s):  
Financial Performance ◽  
Environmental Performance ◽  
Fixed Effects ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Positive Influence ◽  
Equation Model ◽  
Business Practices ◽  
Asian Countries

This study empirically investigates the simultaneous association between the quality of environmental performance (EP) and financial performance of firms selected from three Asian countries—Japan, South Korea, and India. The content analysis technique based on a four-point scale was used to measure the quality of EP, whereas financial performance was measured based on the market-to-book ratio. Employing system generalized method of moments and fixed effects regression model in a system of two-equation model, the study finds that EP has a positive impact on financial performance. Similarly, the financial performance has a positive influence on the quality of EP. The findings of the study indicate that a firm can enhance its overall financial performance by improving its EP. This implies that firms not only improve their economic performance through environmentally responsible business practices, but also help in fulfilling some of the sustainable development goals of the United Nation’s 2030 development agenda.

The bright and dark sides of green customer integration (GCI): evidence from Chinese manufacturers

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Taiwen Feng ◽  
Hongyan Sheng ◽  
Minghui Li
Keyword(s):  
Financial Performance ◽  
Information Sharing ◽  
Positive Impact ◽  
Resource Dependence Theory ◽  
Dark Side ◽  
Opportunistic Behavior ◽  
Moderating Effects ◽  
Customer Integration ◽  
Content Type ◽  
The Impact

PurposeBased on resource dependence theory and transaction cost economics this study explores how green customer integration (GCI) affects financial performance via information sharing and opportunistic behavior, and the moderating effects of dependence and trust.Design/methodology/approachThis study develops a theoretical model and tests it using data from two-waved survey data of 206 Chinese manufacturers. The hypotheses were tested using hierarchical linear regression analysis.FindingsThe results show that GCI has a significant and positive impact on information sharing, but its impact on opportunistic behavior is insignificant. Notably, information sharing has a significant and positive impact on financial performance, while opportunistic behavior has an insignificant impact on financial performance. In addition, dependence negatively moderates the impact of GCI on information sharing and positively moderates the impact of GCI on opportunistic behavior. Trust negatively moderates the impact of GCI on opportunistic behavior.Originality/valueAlthough GCI has received widespread attention, how it affects a firm's performance remains unclear. Most previous studies have focused only on its bright side and ignored its dark side. This study highlights how GCI affects financial performance through information sharing and opportunistic behavior, and the moderating effects of dependence and trust. This enriches the understanding of how and under what conditions GCI affects a firm's performance.

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