Consumer debt holding, income and happiness: evidence from China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jing Jian Xiao ◽  
Chengyang Yan ◽  
Piotr Bialowolski ◽  
Nilton Porto
Keyword(s):  
Medical Education ◽  
Early Stage ◽  
Household Finance ◽  
Credit Market ◽  
Emerging Economy ◽  
Consumer Debt ◽  
Middle Income ◽  
Content Type ◽  
Business Practitioners ◽  
The Relationship

PurposeThe relationship between debt and happiness is an emerging research topic with significant implications for both theory and practice in economics and business. In China, where the consumer credit market is at an early stage of development, the topic remains under-investigated and the evidence on the debt–well-being link is scarce. The purpose of this study is to examine the association between debt holding and happiness and the moderating role of income in it.Design/methodology/approachData used in the study were from three waves (2013, 2015 and 2017) of the China Household Finance Survey. Fixed-effect regressions on panel data were used for data analyses.FindingsThe results show that any type of debt holding is negatively associated with happiness. Among seven specific types of debts, four types show negative associations with happiness, which in the order from higher to lower associations, are medical, education, other and housing debt. In addition, negative associations between debt holding and happiness vary among income groups. The results suggest that any debt holding potentially decreases happiness for low- and middle-income consumers only. In addition, holdings of three specific types of debts (medical, education and housing debt) may decrease happiness for both low- and middle-income consumers, and holding two types of debts (business and other debt) may decrease happiness for middle-income consumers only.Research limitations/implicationsData used in this study originate from one country only. It limits the generalizability of findings to other countries with different institutional backgrounds and different socio-economic characteristics of populations. The results have implications for researchers who study consumer debt behavior and business practitioners who do businesses with Chinese companies and consumers.Practical implicationsChina is an emerging economy that is at the early stage of credit market development. The results of this study provide helpful information and insights for business practitioners to explore credit markets and serve credit product clients with various income levels in China.Social implicationsThe results of this study are informative for public policies. When introducing credit market-related policies, policymakers should pay attention to people's happiness and to differential welfare effects of holdings of different types of debts and among consumers with various levels of incomes.Originality/valueUnique contributions of this study include using data from the most recently available waves of the China Household Finance Survey (2013, 2015 and 2017) to study the associations between debt holding and happiness. In addition, the findings of this study enrich the literature of debt and happiness by adding evidence from China, the largest emerging economy in the world, which is helpful for future theory building and business practice on the relationship between debt holding and happiness.

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.

The impact of media on entrepreneurship participation: a cross-country panel data analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Arshad ◽  
Sharjeel Saleem ◽  
Rabeeya Raoof ◽  
Naheed Sultana
Keyword(s):  
Panel Data ◽  
New Product Development ◽  
Indirect Effect ◽  
Cognitive Theory ◽  
Early Stage ◽  
Entrepreneurial Intention ◽  
Content Type ◽  
Informal Investment ◽  
The Impact ◽  
The Relationship

Purpose Unlike the previous studies that examined the direct relationship between media attention on entrepreneurship (MAE) and entrepreneurship participation, this paper aims to examine the mediated link through entrepreneurial intention. Design/methodology/approach The cognitive theory of media provides the foundation for predictions that primary outcome of MAE is the entrepreneurial intention which in turn affects the different types of entrepreneurship participation (early-stage startup activities, new product development [NPD] activities and informal investment activities). The test of the hypothesized model relies on panel data for 2010–2015 on 40 developing and developed countries taken from the Global Entrepreneurship Monitor report of 2015. Findings MAE has an indirect effect on two types of entrepreneurship participation (early-stage startup activities and informal investment activities) via entrepreneurial intention, whereas there is no direct or indirect effect of MAE on NPD activities. The findings also suggest when the entrepreneurial intention is added as a mediator in the model; the direct effect of MAE on early-stage entrepreneurial activities becomes insignificant. Originality/value To the best of the authors’ knowledge, this is the first study in its nature which established the relationship between MAE and entrepreneurial intention. In addition, this study also explained the mediation mechanism between the relationship of MAE and entrepreneurship participation by using the panel data.

The role of heuristic-driven biases in entrepreneurial strategic decision-making: evidence from an emerging economy

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maqsood Ahmad ◽  
Syed Zulfiqar Ali Shah ◽  
Yasar Abbass
Keyword(s):  
Decision Making ◽  
Emerging Economy ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Decision Making Process ◽  
Strategic Decisions ◽  
Content Type ◽  
The Relationship

PurposeThis article aims to clarify the mechanism by which heuristic-driven biases influence the entrepreneurial strategic decision-making in an emerging economy.Design/methodology/approachEntrepreneurs' heuristic-driven biases have been measured using a questionnaire, comprising numerous items, including indicators of entrepreneurial strategic decision-making. To examine the relationship between heuristic-driven biases and entrepreneurial strategic decision-making process, a 5-point Likert scale questionnaire has been used to collect data from the sample of 169 entrepreneurs who operate in small- and medium-sized enterprises (SMEs). The collected data were analyzed using SPSS and Amos graphics software. Hypotheses were tested using structural equation modeling (SEM) technique.FindingsThe article provides empirical insights into the relationship between heuristic-driven biases and entrepreneurial strategic decision-making. The results suggest that heuristic-driven biases (anchoring and adjustment, representativeness, availability and overconfidence) have a markedly negative influence on the strategic decisions made by entrepreneurs in emerging markets. It means that heuristic-driven biases can impair the quality of the entrepreneurial strategic decision-making process.Practical implicationsThe article encourages entrepreneurs to avoid relying on cognitive heuristics or their feelings when making strategic decisions. It provides awareness and understanding of heuristic-driven biases in entrepreneurial strategic decisions, which could be very useful for business actors such as entrepreneurs, managers and entire organizations. Understanding regarding the role of heuristic-driven biases in entrepreneurial strategic decisions may help entrepreneurs to improve the quality of their decision-making. They can improve the quality of their decision-making by recognizing their behavioral biases and errors of judgment, to which we are all prone, resulting in a more appropriate selection of entrepreneurial opportunities.Originality/valueThe current study is the first to focus on links between heuristic-driven bias and the entrepreneurial strategic decision-making in Pakistan—an emerging economy. This article enhanced the understanding of the role that heuristic-driven bias plays in the entrepreneurial strategic decisions and more importantly, it went some way toward enhancing understanding of behavioral aspects and their influence on entrepreneurial strategic decision-making in an emerging market. It also adds to the literature in the area of entrepreneurial management specifically the role of heuristics in entrepreneurial strategic decision-making; this field is in its initial stage, even in developed countries, while, in developing countries, little work has been done.

scholarly journals The relationship between intellectual capital information and firms’ market value: a study from an emerging economy

2019 ◽  
Vol 24 (1) ◽  
pp. 39-51
Author(s):  
A.A. Ousama ◽  
Mashael Thaar Al-Mutairi ◽  
A.H. Fatima
Keyword(s):  
Intellectual Capital ◽  
Firm Value ◽  
Stock Exchange ◽  
Market Value ◽  
Total Sample ◽  
Emerging Economy ◽  
Annual Reports ◽  
Content Type ◽  
Knowledge Based Economy ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between the intellectual capital (IC) information reported in the annual reports and market value of the companies listed on the Qatar Stock Exchange. Design/methodology/approach The study is based on a panel data collected from the annual reports and Bloomberg database for six years, specifically the periods 2010-2012 and 2016-2018. The total sample consists of 252 observations. The theoretical framework was developed in reference to the resource-based theory. The regression model is based on Ohlson’s model, which has been modified by including IC information. Findings The study found that there is a significant relationship between IC information and firm market value. This finding indicates that companies report their IC to help the stakeholders (e.g. shareholders, investors) to understand the real value of the company (which includes IC values). Practical implications The shift to a knowledge-based economy (KBE) has made knowledge a driver for economic growth, and it has become more important than capital, land and labour. This shift makes IC and resources vital for companies to create wealth, value and gain competitive advantage. The State of Qatar plans to transform its economy to a KBE in its “Qatar Vision 2030”. The findings of the study show that the companies have started to depend more on IC to contribute to transforming Qatar’s economy to a KBE. Originality/value This study could be considered a pioneer study to examine the association of IC disclosure and firm value in Qatar. Furthermore, prior literature has mixed findings, which justifies further investigation of IC’s effect on market value, particularly in the emerging economy of Qatar.

A new approach to the Scoreboard

2015 ◽  
Vol 42 (4) ◽  
pp. 659-688
Author(s):  
Cosimo Magazzino ◽  
Francesco Felici ◽  
Vanja Bozic
Keyword(s):  
European Commission ◽  
Design Methodology ◽  
Early Stage ◽  
Critical Issue ◽  
Added Value ◽  
Policy Makers ◽  
New Approach ◽  
Content Type ◽  
Starting Point ◽  
The Relationship

Purpose – The purpose of this paper is to investigate the information content of the variables that can help detecting external and internal imbalances in an early stage. The starting point is the Scoreboard, where nine indicators are chosen in order to increase macroeconomic surveillance of all member states. Design/methodology/approach – This paper provides an overview of the variables that could be informative for imbalances by focusing on EU-27 countries over the period 1960-2010. The number of chosen variables is 28, and they are aggregated in six macro-areas. Therefore, once an imbalance is observed in any of those areas, it is possible to detect in a simple way which specific variable is determining such outcome. Findings – In general, this approach provides reliable signal to the policy-makers about the indicators that can drive imbalances within the area, shedding light on the relationship among the variables included in the analysis, too. Research limitations/implications – In fact, the empirical results underline some well-known critical issue for several countries, and is largely in line with results obtained in a variety of EC and OECD studies. Originality/value – The main added value of the approach adopted in this paper is the introduction of more variables than those initially proposed by the European Commission in the construction of the Scoreboard. This provides more information about the macroeconomic situation in each country, preserving, however, the simplicity of the analysis as the variables are aggregated by homogeneous areas.

scholarly journals Dynamic capability of the firm: analysis of the impact of internationalisation on SME performance in an emerging economy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahfuzur Rahman ◽  
Dieu Hack-Polay ◽  
Sujana Shafique ◽  
Paul Agu Igwe
Keyword(s):  
Firm Performance ◽  
Emerging Economies ◽  
Dynamic Capabilities ◽  
Emerging Economy ◽  
Two Dimensions ◽  
Dynamic Capability ◽  
Content Type ◽  
Market Expansion ◽  
The Impact ◽  
The Relationship

PurposeInternationalisation is considered as a key strategy for the growth of Small and Medium Enterprises (SMEs). The purpose of this paper is to examine the relationship between dynamic capability, SMEs internationalisation and firm performance in the context of emerging economies and to evaluate the impact of financial, asset and market expansion on internationalisation of SMEs.Design/methodology/approachUsing primary data from 212 SMEs from Bangladesh, structural equation modelling and mathematical (hierarchical reflective) model, the analysis enabled the measurement of the casual relationship on the impacts of internationalisation.FindingsThe results revealed that internationalisation of SMEs has significant impact on both financial and non-financial performance of SMEs in an emerging economy- Bangladesh. The paper found internationalisation impacts on two dimensions (financial and non-financial) with eight defined indicators – higher sales, higher profit, assets maximisation, market expansion, competitive advantage, better reputation, better customer service and added knowledge.Originality/valueDespite several studies that examine the relationship between SME internationalisation and firm performance, limited research exists on emerging economies. This is contrary to the fact that SMEs are one of the main vehicles for growth in those economies such as Bangladesh. In this research, the authors use the theories of dynamic capabilities to conceptualise how internationalisation becomes a core SME capability for SMEs in an emerging economy.

Finance, corporate value and credit market freedom in overinvesting US firms

2020 ◽  
Vol 20 (6) ◽  
pp. 1053-1072
Author(s):  
Alfonsina Iona ◽  
Marco Alberto De Benedetto ◽  
Dawit Zerihun Assefa ◽  
Michele Limosani
Keyword(s):  
Corporate Finance ◽  
Firm Value ◽  
Cash Holdings ◽  
Agency Problems ◽  
Credit Market ◽  
The State ◽  
Corporate Value ◽  
Content Type ◽  
External Finance ◽  
The Relationship

Purpose Using a sample of US firms more likely to be affected by agency problems, the purpose of this paper is to investigate the relationship between corporate value and financial policies and to study whether credit market freedom (CMF) affects this relationship. Design/methodology/approach The authors identify a sub-sample of non-financial US firms potentially affected by agency problems using a joint criterion of over-investment and high cash-holdings. A generalized method of moment econometric framework is then used to estimate the impact of cash-holdings and leverage policies on firm value for this sub-sample. This exercise is also performed by taking into account the level of CMF of the state where the firm operates. Findings The results show that the relationship between cash-holdings – or leverage – and firm value is “U-shaped.” In addition, when the authors focus on the role played by the level of CMF, the authors find a number of interesting facts: CMF facilitates the firms’ access to external finance, thereby relaxing the need of internal funds for investing; the relationship between cash-holdings and firm value is “U-shaped” only in states enjoying high levels of CMF; the probability of observing firms more likely to be affected by agency problems is higher in states with high levels of CMF. Research limitations/implications The empirical findings provide important insights to policymakers, shareholders and practitioners. To policymakers, the results suggest that providing institutional environments with greater CMF can enhance the firm access to external finance, the level of corporate investment and the economic growth. To shareholders, the findings highlight that the conflicts of interest between managers and shareholders may be more severe in states with higher CMF; therefore, adequate financing policies and corporate governance mechanisms must be used to mitigate these conflicts and maximize the firm value. Finally, to practitioners, the evidence suggests that, in valuing a firm, they must take into consideration whether the economic environment provides managers with more freedom to stockpile cash and invest sub-optimally. Originality/value The paper contributes to the corporate finance and governance literature in two respects. First, it provides new evidence on the shape of the relationship between cash holdings and firm value for firms affected by empire-building managers. Second, at the best of the knowledge, it is the first corporate finance study, which analyzes the role played by the CMF at the state level on the capital structure and the level of investment of the firms.

The relationship between cross-border acquisitions and R&D investments by Indian firms – substituting or complementing

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ajay Kumar Singal ◽  
Faisal Mohammad Ahsan
Keyword(s):  
Resource Constraints ◽  
Emerging Market ◽  
Main Idea ◽  
Generalized Least Squares ◽  
Emerging Economy ◽  
Least Squares Regression ◽  
Data Set ◽  
Content Type ◽  
Cross Border ◽  
The Relationship

PurposeEmerging economy firms seek strategic assets through cross-border acquisitions (CBAs) to upgrade their capabilities. The paper explores the relation between emerging economy firms' investments in CBAs and subsequent investments in domestic R&D. It investigates the underlying mechanism that links a firm's decision to pursue CBAs and the outcomes from the CBAs. The main idea behind the study is that firms have higher possibility of creating value from cross-border acquisitions when they simultaneously invest in domestic R&D though both investments are constrained by financial and managerial resources.Design/methodology/approachThe hypotheses are tested on a panel data set of 296 Indian firms over a period of 13 years (2003–2015). The authors use a two-stage Heckman procedure for testing their hypotheses. In the first stage, a probit model predicts the probability of a firm being a cross-border acquirer. The second stage model is estimated by a pooled-data GLS (generalized least squares) regression technique.FindingsThe authors find a nonlinear (inverted U-shaped) relationship between firm's investments in CBAs and domestic R&D. This suggests a complementary relation between investments in CBAs and a firm's domestic R&D at lower levels of investments in CBAs. At higher levels of investments in CBAs, CBA investments begin to substitute for firm's domestic R&D investments. For firms with higher international product-market experience and those operating in the hi-tech industry, the relationship between investments in CBAs and domestic R&D is complementary even at higher levels of CBA investments.Originality/valueThe study highlights the role of an emerging market firm's investment in domestic R&D as a link between the decision to invest in CBAs and related outcomes thereof. Emerging market firms face resource constraints while pursuing simultaneous investments in CBAs and R&D, but investment in R&D is essential for realizing the acquisition objectives. The authors also establish the significance of industry context and experiential learning in deciding the allocation of resources between CBAs and internal R&D.

The effects of financial deepening on income inequality based on grey incidence analysis

2014 ◽  
Vol 4 (3) ◽  
pp. 495-504 ◽  
Author(s):  
Quanda Zhang
Keyword(s):  
Income Inequality ◽  
Credit Market ◽  
Insurance Market ◽  
Urban Residents ◽  
Financial Deepening ◽  
Rural Residents ◽  
Content Type ◽  
Per Capita ◽  
Incidence Analysis ◽  
The Relationship

Purpose – The purpose of this paper is to clarify the relationship between income inequality and financial deepening. The majority of theoretical studies on the relationship between them argue that financial deepening has a positive effect on the income inequality. This paper aims to study the case of China, and explores whether the effects of financial deepening on income inequality varies between urban residents and rural residents. Design/methodology/approach – Using the grey incidence analysis, this paper first calculates the degree of grey incidence between dependent variables, i.e. per capita disposable income of urban residents, per capita net income of rural residents and overall Theil Inequality Index for China, and independent variables, depth of credit, depth of direct financing and depth of insurance. Next, multiple non-linear regression is introduced to build the model. With the method of unit root test and co-integration test, some equations are given to show the clear relationship among the variables. Findings – The empirical results indicate that the development of credit market does not have a strong relationship both with the growth of income and income inequality. While the development of both the direct financing market and the insurance market is closely related to the growth of income and income inequality. Originality/value – The results of this paper suggest that the protection of the rights and interests of medium-sized investors is the key for the capital market. Meanwhile, the insurance market should be encouraged to expand in both breadth and depth, which helps to take full advantage of its functions. As for the credit market, more resources should be allocated to those who need them most the small- and medium-sized enterprises, which will contribute to the growth of the income for the majority and narrowing the income gap.

A causal analytic model to evaluate the impact of researchers’ individual innovativeness on their collaborative outputs

2016 ◽  
Vol 11 (2) ◽  
pp. 585-611 ◽  
Author(s):  
Oguz Cimenler ◽  
Kingsley A. Reeves ◽  
John Skvoretz ◽  
Asil Oztekin
Keyword(s):  
Explicit Knowledge ◽  
Early Stage ◽  
Collaborative Network ◽  
College Administration ◽  
Content Type ◽  
Strength Of Weak Ties ◽  
Individual Innovativeness ◽  
Interpersonal Ties ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to provide a model that tests to what extent researchers’ interactions in the early stage of their collaborative network activities affect the number of collaborative outputs (COs) produced (e.g. joint publications, joint grant proposals and joint patents). Design/methodology/approach Using self-reports from 100 tenured/tenure-track faculty at a US-based university, partial least squares (PLS) path models are run to test the extent to which researchers’ individual innovativeness (Iinnov) affects the number of COs they produced taking into account the tie strength (TS) of a researcher to other conversational partners. Iinnov is determined by the specific indicators obtained from researchers’ interactions in the early stage of their collaborative network activities. Findings The results indicate that researchers’ Iinnov positively affects the volume of their COs. Furthermore, TS negatively affects the relationship between researchers’ Iinnov and the volume of their COs, which is consistent with the famous “Strength of Weak Ties” theory. Practical implications By investigating the degree of impact of researchers’ Iinnov on their CO, college administration could be informed regarding the extent that the social cohesion formed by interpersonal ties affects or drives the collaboration activity that results in COs. When this paper is extended to the entire university, university administration would know the capability of the different colleges, or even the university as a whole, in transforming the ideas embedded in researchers’ networks into a productive work in a collaborative manner. Originality/value It is one of the foremost attempts to investigate the relationship between researchers’ Iinnov during ideation phase and their CO. Moreover, this paper contributes to the literature regarding the transformation of tacit knowledge into explicit knowledge at a university context.

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