Diversification and performance in the hotel industry: do board size and family representation matter?

2019 ◽  
Vol 31 (8) ◽  
pp. 3306-3324
Author(s):  
Chen Zheng (Jerry) ◽  
Henry Tsai
Keyword(s):  
Hong Kong ◽  
Firm Performance ◽  
Fixed Effects ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Board Size ◽  
Content Type ◽  
Bivariate Correlation ◽  
Managerial Implications ◽  
Family Representation

Purpose This study aims to empirically examine the relationship between industrial diversification and firm performance and the moderating effects exerted on that relationship by board size and family representation on the board. Design/methodology/approach Secondary financial data were collected for hotel firms listed on the Hong Kong Stock Exchange during the period 2005-2016. Subsequently, a bivariate correlation and a fixed-effects panel regression analysis were performed on the data. Findings The empirical results showed that diversification positively influenced firm performance until firms reached an optimal level of diversification (0.34); beyond that level, the effect was negative. In addition, firms with a larger board tended to show better performance when the level of diversification increased from medium to high, and firms with lower family representation on the board tended to exhibit better performance when the level of diversification increased from low to medium. Practical implications Theoretical and managerial implications are suggested in terms of balancing the size of a firm’s board and with regard to family representation on a board from the perspectives of resource dependence theory (RDT) and socioemotional wealth (SEW), the diversification of hotel firms and future research. Originality/value A limited number of studies have considered diversification as a corporate-level strategy in the hospitality field and in the unique context in which a service-oriented economy is dominant, such as in Hong Kong. The role of board composition on the diversification–performance relation has rarely been investigated theoretically and empirically. Apart from providing managerial implications for corporate governance, this study also offers theoretical generalizability, from the perspectives of RDT and SEW, to examine the moderating roles of board size and family representation on the diversification–firm performance relation.

Board structure: an empirical study of firms in Anglo-American governance environments

2014 ◽  
Vol 40 (7) ◽  
pp. 681-699 ◽  
Author(s):  
M.I. Muller-Kahle ◽  
Liu Wang ◽  
Jun Wu
Keyword(s):  
Firm Value ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Board Independence ◽  
Board Structure ◽  
Board Size ◽  
Content Type ◽  
The Usa ◽  
The Uk ◽  
The Impact

Purpose – With boards of directors playing both monitoring and guidance roles, the purpose of this paper is to examine the impact of board structure on firm value in large US and UK firms using the lenses of agency and resource dependence theories. Design/methodology/approach – Using a sample of firms in the USA and the UK from 2000 to 2007, the paper conducts a panel data analysis of the impact of board structure on firm value and examine the nuances of different governance environments. Findings – The paper finds distinct differences in the impact of board independence, board size, and outside director busyness on firm value between UK and US firms. Specifically, the paper finds that board independence, board size, and board busyness all have a significant positive impact on firm value in the UK. However, the paper finds no significant relationship between board independence and firm value among US firms. Both board size and board busyness are found to be positively associated with firm value in the USA. Social implications – The paper finds strong support for resource dependence theory in the UK but limited support for agency theory in the USA. Originality/value – This paper takes a multi-country approach to examining the impact of board structure on firm value.

scholarly journals Trends on the relationship between board size and financial and reputational corporate performance

2018 ◽  
Vol 27 (2) ◽  
pp. 183-197 ◽  
Author(s):  
Luis Antonio Orozco ◽  
Jose Vargas ◽  
Raquel Galindo-Dorado
Keyword(s):  
Empirical Evidence ◽  
Corporate Reputation ◽  
High Performance ◽  
Resource Dependence ◽  
Corporate Performance ◽  
Resource Dependence Theory ◽  
Board Structure ◽  
Board Size ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between board size (B-SIZE) and financial and reputational corporate performance in top companies ranked by the Business Monitor of Corporate Reputation – MERCO in Colombia. Design/methodology/approach This paper conducts correlations and cluster analysis in order to classify firms based on performance and control variables, using a sectional sample of 84 large companies in Colombia over the period 2008-2012. Findings This research founds that large boards are associated with high performance on corporate reputation, as stated by the resource dependence theory, and a low-financial performance, as predicted by the agency theory. However, the results indicate that there is no relation between financial and reputational performance. Research limitations/implications This research considered only large companies listed by MERCO. Therefore, the results can only be generalized for top firms in Colombia according to this list. However, results add empirical evidence to theoretical debate between B-SIZE and firm performance considering financial and reputational indicators. Practical implications According to the OECD manual of good corporate governance practices, the optimal B-SIZE has between five to nine core members. The board structure has a direct impact over the firm’s financial and reputational performance and must be carefully analyzed by shareholders to balance the size according to expected results and firm’s features like family ownership, exportation activities and norms of stock markets. Originality/value This paper contributes to the existing literature on the relationship between B-SIZE and corporate performance with the evaluation of financial and reputational results for the case of an emerging economy. In Latin America, this analysis must go beyond OECD recommendations, and shall consider the context of an emerging country based on empirical evidence.

The moderating effect of firm size on relational capital and firm performance

2019 ◽  
Vol 20 (4) ◽  
pp. 510-532 ◽  
Author(s):  
Antonio Corvino ◽  
Francesco Caputo ◽  
Marco Pironti ◽  
Federica Doni ◽  
Silvio Bianchi Martini
Keyword(s):  
Firm Performance ◽  
Competitive Advantage ◽  
Firm Size ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Moderating Effect ◽  
Relational Capital ◽  
Ongoing Debate ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this paper is to contribute to the ongoing debate regarding the relationship between relational capital (RC) and firm performance, by investigating the moderation effect of firm size and its key role in defining conditions for competitive advantage. Design/methodology/approach The paper uses the interpretative lens of the resource dependence theory, and refreshes consolidated studies rooted in RC. It identifies a set of variables to measure the influence of RC on firm performance, including the cost of goods sold, interest expenses and earnings per share. Content analysis was used to capture specific features of corporate disclosure tools using 51 items pertinent to RC. The authors used a specific disclosure index drawing on data collected from 73 listed firms in France, Germany, Italy and the UK. Data covering the period from 2011 to 2013 were analyzed using six regression models. Findings Firm size has a moderating effect on the relationship between RC and some variables linked to firm performance. Originality/value The study combines an internal and external perspective to investigate the interplay between firms and market environments, and therefore, enriches the ongoing debate concerning the relationship between RC and firm performance. It outlines possible ways through which RC can become an effective source of competitive advantage.

The link between independent directors and firm’s performance: the moderating role of corporate social responsibility

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hien Thi Tran
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Fixed Effects ◽  
Resource Dependence ◽  
Estimation Method ◽  
Resource Dependence Theory ◽  
Independent Directors ◽  
Data Set ◽  
Content Type ◽  
Corporate Social

Purpose This paper aims to examine how independent directors (IDs) affect a firm’s performance measured on profitability, with corporate social responsibility (CSR) interaction. Design/methodology/approach The study uses an international data set of 1,817 firm-year observations from 545 large companies in 20 countries across Asia, America and Europe, and the fixed-effects estimation method. Findings The direct effect of IDs alone on profitability is statistically insignificant; however, the synergic effect of IDs and CSR on profitability becomes significantly positive when firms disclose CSR information. Practical implications The profitability is partially sourced from the synergy of IDs and stakeholders through CSR. IDs may use CSR disclosure to win stakeholders’ goodwill. This goodwill will likely be transformed into profitability. The empirical results indicate that there should be more need for IDs’ engagement in CSR projects as the resources of IDs combined with external stakeholders can be of important value to firms. Originality/value This paper reveals the underlying mechanism that firm-idiosyncratic value is formed using a combination of ID resources and stakeholders through CSR. This research extends the literature of IDs’ efficiency and effectiveness and confirms the agency theory and resource dependence theory.

scholarly journals CEO duality and firm performance: the moderating roles of CEO informal power and board involvements

2019 ◽  
Vol 16 (8) ◽  
pp. 1453-1474
Author(s):  
Chaminda Wijethilake ◽  
Athula Ekanayake
Keyword(s):  
Firm Performance ◽  
Sri Lanka ◽  
Board Of Directors ◽  
Large Scale ◽  
Resource Dependence ◽  
Listed Companies ◽  
Resource Dependence Theory ◽  
Ceo Duality ◽  
Content Type ◽  
The Board Of Directors

Purpose This study aims to draw on the resource dependence theory to synthesize the conflicting arguments as well as commonalities of the agency and stewardship perspectives on the relationship between CEO duality and firm performance. Design/methodology/approach Multiple regression analysis is used to analyze the data collected from a sample of 212 large-scale publicly listed companies representing 20 sectors in the Colombo Stock Exchange in Sri Lanka. Findings The research results based on all of 212 publicly listed companies in Sri Lanka show, in support of the agency theory, that CEO duality exerts a negative effect on firm performance when the CEO is equipped with additional informal power. Conversely, CEO duality exhibits a positive effect on firm performance when board involvements are high, a finding that supports the commonalities of the agency and stewardship theoretical perspectives. Practical implications By examining the governance practices and concepts in an Asian developing economy, this study provides insight into the power dynamics between the CEO and the board of directors in managerial contexts that are largely different from those in western countries. Originality/value This study expands the theoretical underpinning of corporate governance research by identifying the performance implications of CEO duality within the broad context of the resource provision of the board of directors and the informal power of CEOs.

Ownership concentration, board characteristics and firm performance

2015 ◽  
Vol 53 (5) ◽  
pp. 911-931 ◽  
Author(s):  
Sanjaya S. Gaur ◽  
Hanoku Bathula ◽  
Deeksha Singh
Keyword(s):  
Firm Performance ◽  
Resource Dependence Theory ◽  
Ownership Concentration ◽  
Unique Contribution ◽  
Governance Mechanism ◽  
Board Size ◽  
Content Type ◽  
Positive Effects ◽  
Firm Governance ◽  
Contingency Framework

Purpose – The purpose of this paper is to advance the understanding of the relationship between firm-level governance mechanisms and firm performance using a contingency framework. The contingency framework is based on an integration of agency theory, stewardship theory, resource dependence theory and stakeholder theory of firm governance. Design/methodology/approach – The authors test the arguments on a sample of all the listed firms on the New Zealand Stock Exchange between 2004 and 2007. Given the longitudinal nature of the data, the authors employ random effects, generalized least square estimation to run the regression models. Findings – The authors find that the presence of internal directors, CEO duality, board size and presence of professional directors leads to superior firm performance. A lack of ownership concentration leads to agency problems resulting in inferior performance. However, the positive effect of board independence on firm performance reduces in firms that have a high-ownership concentration. Additionally, a high-ownership concentration attenuates the positive effects of board size and board competence. Originality/value – This study helps reconcile some of the conflicting findings on firm governance-performance relationship. As the findings suggest, the effectiveness of a particular governance mechanism (such as board members) may depend on the presence or absence of another governance mechanism (such as ownership concentration). The integrative, multi-theoretic model that the authors propose in this paper is a unique contribution to the governance literature.

Is doing economically good enough to shape the MNE’s governmental relations? In contingency with contextual influences

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chun-Ping Yeh ◽  
Hsueh-Liang Wu ◽  
Yi-Chi Hsiao
Keyword(s):  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Contextual Influences ◽  
Snowball Sampling ◽  
Institutional Perspective ◽  
Data Set ◽  
Content Type ◽  
Political Activities ◽  
Managerial Implications ◽  
Mne Subsidiaries

Purpose In response to the tilted emphasis on the corporate political activities and to the recent call for including the institutional perspective in the research of the MNE’s governmental relations (MGRs), this study aims to, departing from resource dependence theory, introduce the legitimacy formation as a bridging mechanism to MGRs to holistically examine the behavioral types of antecedents of MGRs in contingency with three critical contextual influences. Design/methodology/approach This study purposely chose a Taiwanese globalized logistic corporation that we have been acquainted with as the entry for collecting data. The study started the survey with the seven foreign subsidiaries of this logistic corporation and invited their customers through their personal referrals to join this survey. Following the snowball sampling, remarks were added in the questionnaire to request respondents’ assistance in inviting TMT members of different MNE subsidiaries in their personal networks to join the survey. Findings The findings from analyzing a survey data set of 155 MNE subsidiaries during 2016 show that the MNE’s economically-good behaviors are not so influential as Milton Friedman stated in 1962, and can only outperform socially-good and politically-good behaviors in shaping better MGRs under some specific contextual influences. Originality/value This study contributes to the international business literature by shedding new light on the sensitivity of behavioral antecedents of MGRs in contingency with contextual influences and provides managerial implications to MNE particularly when they expect to reduce external uncertainties or capturing opportunities by MGRs.

Board demographic diversity, firm performance and strategic change

2014 ◽  
Vol 37 (12) ◽  
pp. 1110-1136 ◽  
Author(s):  
Daniel Kipkirong Tarus ◽  
Federico Aime
Keyword(s):  
Firm Performance ◽  
Fixed Effects ◽  
Strategic Change ◽  
Secondary Data ◽  
Developed Countries ◽  
Outcome Variable ◽  
Demographic Diversity ◽  
Content Type ◽  
Fixed Effects Regression ◽  
High Level

Purpose – The purpose of this study is to examine the effect of boards’ demographic diversity on firms’ strategic change and the interaction effect of firm performance. Design/methodology/approach – This paper used secondary data derived from publicly listed firms in Kenya during 2002-2010 and analyzed the data using fixed effects regression model to test the effect of board demographic and strategic change, while moderated regression analysis was used to test the moderating effect of firm performance. Findings – The results partially supported board demographic diversity–strategic change hypothesis. In particular, results indicate that age diversity produces less strategic change, while functional diversity is associated with greater levels of strategic change. The moderated regression results do not support our general logic that high firm performance enhances board demographic diversity–strategic change relationship. In effect, the results reveal that at high level of firm performance, board demographic diversity produces less strategic change. Originality/value – Despite few studies that have examined board demographic diversity and firm performance, this paper introduces strategic change as an outcome variable. This paper also explores the moderating role of firm performance in board demographic diversity–strategic change relationship, and finally, the study uses Kenyan dataset which in itself is unique because most governance and strategy research uses data from developed countries.

The effect of supplier globalization on firm innovation: a resource dependence theory perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yibo Wang ◽  
Bai Liu
Keyword(s):  
Resource Dependence ◽  
Positive Impact ◽  
Market Competition ◽  
Effective Means ◽  
Resource Dependence Theory ◽  
Institutional Distance ◽  
Foreign Firms ◽  
Firm Innovation ◽  
Content Type ◽  
Dependence Theory

PurposeEither buying or making is predicted by the existing literature for firms to reduce dependence. However, firms in the rapid globalization are found to adopt a pattern of buying and making. Specially, they critically rely on foreign firms for needed materials and goods, and invest in innovation against the uncertainty of potential supply disruptions simultaneously. Therefore, this paper seeks to investigate how the depth and width of supplier globalization shape firm innovation together. Moreover, the moderating effects of institutional distance and market competition are also examined in the paper.Design/methodology/approachGrounded on the resource dependence theory, this paper develops a theoretical framework and tests the proposed hypotheses by Poisson model using secondary data from 502 Chinese listed firms with foreign suppliers.FindingsThe depth of supplier globalization has a positive impact on firm innovation, while the width of supplier globalization weakens firm innovation. The depth and width of supplier globalization further interact negatively to influence firm innovation. Moreover, this relationship is enhanced when firms establish relationships with foreign firms with greater institutional distance and is weakened when firms face fiercer product competition.Originality/valueThe authors contribute to the literature by evidencing that the existence of foreign suppliers results in firms' enhancement of innovation to secure their operations and showing that diversifying the country origins of foreign suppliers is an effective means to reduce firms' uncertainty about supply disruption. We also advance the understanding regarding the contextual factors in which firms are more likely or less likely to manage the uncertainty about supplier globalization.

Role of ambidexterity and learning capability in firm performance

2018 ◽  
Vol 48 (4) ◽  
pp. 517-536 ◽  
Author(s):  
Sanjay Dhir ◽  
Swati Dhir
Keyword(s):  
Firm Performance ◽  
Developed Countries ◽  
Two Dimensions ◽  
Survey Method ◽  
Learning Capability ◽  
Content Type ◽  
Multiple Resources ◽  
Managerial Implications ◽  
Managerial Positions ◽  
Exploration Exploitation

Purpose This study aims to comprehend the ambidexterity and organizational learning capability construct in the Indian E-commerce industry context. Design/methodology/approach The survey method was adopted for this study. A survey was circulated among the personnel working in E-commerce companies in India. The focus was on people working in managerial positions and had at least three years of experience in the same industry. Findings This paper investigates the link between two dimensions of ambidexterity, i.e., exploration, exploitation and learning capability in firm performance. The paper also establishes the moderating effect of the learning capability on the two dimensions of ambidexterity and firm’s performance. Research/limitations/implications Our focus was to cover most of the E-commerce companies, yet to generalize the research the analysis needs to be conducted with even more E-commerce companies. Although we took extraordinary care to gather data from multiple resources and discarded the data that was incomplete or was from lower level employees yet, we need a larger sample to establish the causal claim of our model. Practical/implications We reason that learning capability of a firm impacts the two dimensions and firms should focus both on external and internal knowledge to benefit from the ambidexterity efforts. Social/implications Learning capability influences a firm’s performance and has managerial implications. The analysis’ results on the India based ecommerce companies differs from prior research done in more developed countries and other industries. Originality/value No prior research has been done from this perspective in the Indian context, and thus our work opens up new avenues for researchers to look at.Keywords Ambidexterity, Firm performance, Learning capability

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