Long-term focus and attitude toward entrepreneurial behaviors: the moderating effect of industry-clockspeed

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nischal Thapa ◽  
Puspa Shah
Keyword(s):  
Fixed Effects ◽  
Moderating Effect ◽  
Least Squares Regression ◽  
Conference Calls ◽  
Firm Level ◽  
Content Type ◽  
Industry Clockspeed ◽  
The Relationship ◽  
The Empirical Analysis

Purpose This study aims to identify and examine the antecedents of attitude toward entrepreneurial behaviors (ATEB) of firms. Additionally, this study also identifies and examines the antecedents of innovativeness and proactiveness. Furthermore, this study explains how factors within and outside the organization affect ATEB, innovativeness and proactiveness. Design/methodology/approach This study uses the attention-based view (ABV) and examines the effects of long-term focus and industry clockspeed on attitude toward firms’ entrepreneurial behaviors (EB). This study measures ATEB by analyzing the top management team’s words in the earnings conference calls. It applies the two-stage least squares regression with fixed effects and instrumental variables to conduct the empirical analysis. Findings The results indicate that the direct effects of long-term focus and industry clockspeed on ATEB are not significant. However, the moderating effect of industry clockspeed on the relationship between long-term focus and EB is significant and positive. The results indicate that firms that are operating in fast clockspeed industries exhibiting long-term focus exhibit EB. Furthermore, the results also indicate that long-term focus and industry clockspeed collectively affect innovativeness and proactiveness. Practical implications This research helps firms to develop entrepreneurial behavior operating under various task environment conditions. Originality/value This study applies the ABV of the firm and contributes to the area of firm-level EB, while prior studies have not implemented this perspective in investigating firm-level EB. Past studies have not applied the ABV of the firm to study EB, innovativeness and proactiveness either independently or collectively.

Audit committee characteristics and the moderating effect of Malaysian code of corporate governance on IPO liquidity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amal Mohammed Al-Masawa ◽  
Rasidah Mohd-Rashid ◽  
Hamdan Amer Al-Jaifi ◽  
Shaker Dahan Al-Duais
Keyword(s):  
Corporate Governance ◽  
Initial Public Offerings ◽  
Audit Committee ◽  
Ordinary Least Squares ◽  
Moderating Effect ◽  
Least Squares Regression ◽  
Content Type ◽  
Code Of Corporate Governance ◽  
The Impact ◽  
The Relationship

Purpose This study aims to investigate the link between audit committee characteristics and the liquidity of initial public offerings (IPOs) in Malaysia, which is an emerging economy in Southeast Asia. Another purpose of this study is to examine the moderating effect of the revised Malaysian code of corporate governance (MCCG) on the link between audit committee characteristics and IPO liquidity. Design/methodology/approach The final sample consists of 304 Malaysian IPOs listed in 2002–2017. This study uses ordinary least squares regression method to analyse the data. To confirm this study’s findings, a hierarchical or four-stage regression analysis is used to compare the t-values of the main and moderate regression models. Findings The findings show that audit committee characteristics (size and director independence) have a positive and significant relationship with IPO liquidity. Also, the revised MCCG positively moderates the relationship between audit committee characteristics and IPO liquidity. Research limitations/implications This study’s findings indicate that companies with higher audit committee independence have a more effective monitoring mechanism that mitigates information asymmetry, thus reducing adverse selection issues during share trading. Practical implications Policymakers could use the results of this study in developing policies for IPO liquidity improvements. Additionally, the findings are useful for traders and investors in their investment decision-making. For companies, the findings highlight the crucial role of the audit committee as part of the control system that monitors corporate governance. Originality/value To the authors’ knowledge, this work is a pioneering study in the context of a developing country, specifically Malaysia that investigates the impact of audit committee characteristics on IPO liquidity. Previously, the link between corporate governance and IPO liquidity had not been investigated in Malaysia. This study also contributes to the IPO literature by providing empirical evidence regarding the moderating effect of the revised MCCG on the relationship between audit committee characteristics and IPO liquidity.

Lending relationships, credit ratings and bank loan spreads: evidence from Indonesian listed companies

2020 ◽  
Vol 16 (4) ◽  
pp. 455-479
Author(s):  
Yane Chandera ◽  
Lukas Setia-Atmaja
Keyword(s):  
Fixed Effects ◽  
Credit Ratings ◽  
Listed Companies ◽  
Bank Loan ◽  
Least Squares Regression ◽  
Firm Level ◽  
Content Type ◽  
Lending Relationships ◽  
Loan Spreads ◽  
The Impact

PurposeThis study examines the impact of firm-bank relationships on bank loan spreads and the mitigating role of firm credit ratings on that impact.Design/methodology/approachThe study sample consists of Indonesian publicly listed companies for the period 2006 to 2016; bank-loan data was extracted from the Loan Pricing Corporation Dealscan database. For the degree of firm-bank relationships, the data on each loan is manually computed, using five different methods taken from Bharath et al. (2011) and Fields et al. (2012). All of the regression analyses are controlled for the year fixed effects, heteroscedasticity, and firm-level clustering. To address the endogeneity issues, this study uses several methods, including partitioning the sample, running nearest-neighbour and propensity score matching tests, and using instrumental variables in two-staged least-squares regression models.FindingsIn line with relationship theory and in opposition to the hold-up argument, this study finds that lending relationships reduce bank loan spreads and that the impact is more noticeable among non-rated Indonesian firms. Specifically, each additional unit in the total number of years of a firm-bank relationship and the number of previous loan contracts with the same bank are associated with 7.34 and 9.15 basis-point decreases, respectively, in these loan spreads.Practical implicationsCorporations and banks should maintain close, long-term relationships to reduce the screening and monitoring costs of borrowing. Regulators should create public policies that encourage banks to put more emphasis on relationships in their lending practices, especially in relation to crisis-prone companies.Originality/valueTo the best of the authors’ knowledge, this is the first study to examine the impact of lending relationships on bank loan spreads in Indonesia. The study offers insights on banking relationships in emerging markets with concentrated banking industries, underdeveloped capital markets and prominent business-group affiliations.

Goodwill impairment loss and bond credit rating

2017 ◽  
Vol 25 (1) ◽  
pp. 2-20 ◽  
Author(s):  
Li Sun ◽  
Joseph H. Zhang
Keyword(s):  
Regression Analysis ◽  
Credit Rating ◽  
Credit Ratings ◽  
Negative Relationship ◽  
Least Squares Regression ◽  
Firm Level ◽  
Content Type ◽  
Goodwill Impairment ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this study is to examine the impact of goodwill impairment losses on bond credit ratings. Design/methodology/approach The authors use regression analysis to examine the relationship between goodwill impairment losses and bond credit ratings. Findings The empirical results show a negative relationship between the amount of goodwill impairment losses and bond credit ratings, suggesting that firms with goodwill impairment losses receive lower credit ratings. The authors perform various additional tests, including subsamples in good or bad market time, changes analysis, first time goodwill impairment firms vs subsequent impairment and the two-stage least squares regression analysis to address potential endogeneity issues. The main results persist. Originality/value This paper links and contributes to two streams of literature: goodwill impairment in accounting literature and bond credit ratings in finance literature. Whether a firm’s goodwill impairment losses affect the firm’s bond credit rating remains an interesting question that has not been examined previously. To the best of the authors’ knowledge, this is the first study that directly examines the relationship between goodwill impairment losses and bond ratings at the firm level.

Determinants of SME growth

2016 ◽  
Vol 39 (9) ◽  
pp. 966-986 ◽  
Author(s):  
Habib Kachlami ◽  
Darush Yazdanfar
Keyword(s):  
Random Effects ◽  
Financial Institutions ◽  
Significant Influence ◽  
Fixed Effects ◽  
Explanatory Power ◽  
Ordinary Least Squares ◽  
Firm Level ◽  
Data Set ◽  
Content Type

Purpose The purpose of this paper is to study the firm-level financial variables affecting the growth of small and medium-sized enterprises (SMEs). Design/methodology/approach The study applies a resource-based view to analyze the firm-level as well as industry-level determinants of SME growth. Empirical evidence has also been provided from a data set of SMEs in Sweden to support the hypotheses. For a robust statistical analysis, three models – ordinary least squares (OLS) regression, random-effects regression and fixed-effects regression – are used to examine the influence of explanatory variables on growth. Findings The findings of this study show a positive and significant influence of profitability, short-term debt and size on a firm’s growth across all three models. Results regarding the influence of long-term debt on growth, however, are mixed. While the results of a fixed-effect model show the negative and significant influence of long-term debt on growth, the results according to OLS and random effects show long-term debt positively related to growth. Research limitations/implications This study has been conducted over a period of four years and in the context of Sweden which may limit the generalizability of its results for longer periods and for different contexts. Moreover, the low explanatory power of the models implies the need to also consider other types of variables, such as managerial or socio-economic variables, to better explain the determinants of SME growth. Practical implications Understanding the determinants of growth can be important for policy makers, SME managers and financial institutions. The findings of this study can be used for designing policies which stimulate SME growth. Realizing the financial resources that influence growth can also help SME managers and financial institutions to understand each other’s need for better cooperation. Originality/value This paper applies different models for analyzing large and cross-sectoral data regarding SME growth in the context of Sweden.

The contrasting moderating effect of exploration on the relationship between stock options/stock ownership and a firm’s long-term performance

2018 ◽  
Vol 56 (9) ◽  
pp. 1956-1968 ◽  
Author(s):  
Gun Jea Yu ◽  
Joonkyum Lee
Keyword(s):  
Stock Options ◽  
Chief Executive ◽  
Moderating Effect ◽  
Stock Ownership ◽  
Content Type ◽  
And Performance ◽  
Long Term Performance ◽  
Term Performance ◽  
The Relationship

Purpose The purpose of this paper is to investigate the contrasting moderating effect of a firm’s exploration on the relationship between the two types of long-term incentives (stock options/stock ownership) for the chief executive officers and a firm’s long-term performance. Even though the two types of incentives are designed to improve long-term performance, the degrees of impact on long-term performance differ. Based on behavioral agency theory, this study theoretically and empirically examines the role of a firm’s exploration on the above relationship. Design/methodology/approach This study used three archival sources to obtain data on stock options, stock ownership, patents and exploration, financial measures, and others. Based on a sample of 1,963 firms in various industries from 1995 to 2006, this study tested the moderating effect of a firm’s exploration on the relationship between stock options/ownership and a firm’s performance. Findings This study reveals the contrasting moderating effect of a firm’s exploration on the relationship between stock options/ownership and a firm’s long-term performance: a positive moderating effect on the relationship between stock options and performance and a negative moderating effect on the relationship between stock ownership and performance. In addition, empirical evidence was added on the inverted U-shaped relationship between stock ownership and a firm’s long-term performance. Originality/value There is little research on a firm’s internal characteristics that strengthen or weaken the effects of stock options and stock ownership on firm performance. This study demonstrates the differential moderating effects of exploration on the relationship between stock options/stock ownership and long-term performance. Such effects of exploration come from the different risk features of stock options and stock ownership. The key implication is that stock options could be more effective than stock ownership to enhance a firm’s long-term performance when a firm has a strong exploration orientation.

Productivity, ownership and firm growth: evidence from Indian banks

2016 ◽  
Vol 11 (4) ◽  
pp. 607-631 ◽  
Author(s):  
Saibal Ghosh
Keyword(s):  
Fixed Effects ◽  
Firm Growth ◽  
Fixed Effects Model ◽  
Firm Level ◽  
Content Type ◽  
Passive Learning ◽  
Bank Ownership ◽  
Panel Data Econometrics ◽  
Indian Banks ◽  
The Relationship

Purpose The relation between size and growth in banking firms in emerging economies has not been adequately addressed in the literature. By employing data for 1992-2014, the purpose of this paper is to examine the relationship between growth and productivity and how it interacts with ownership. Design/methodology/approach The longitudinal nature of the data suggests that the appropriate technique for the analysis is panel data econometrics. Accordingly, consistent with prior research, the author employs a fixed effects model. Besides accounting for firm-level observables, the author controls the economic environment and bank ownership by employing real GDP growth and ownership dummies. Findings The evidence appears to suggest that growth improves through both active and passive learning, the magnitude of the former far outweighing that of the latter. These results are remarkably robust: both baseline regressions and sensitivity tests point to similar conclusions. Originality/value To the best of the author’s knowledge, the paper makes two original contributions. First and more broadly, it tests the relationship between growth and productivity for banks in a leading emerging economy. Second, it distinguishes between two kinds of learning – active and passive – and explores which of them are more relevant for growth.

scholarly journals Trustee board diversity, governance mechanisms, capital structure and performance in UK charities

2018 ◽  
Vol 18 (3) ◽  
pp. 478-508 ◽  
Author(s):  
Mohamed H. Elmagrhi ◽  
Collins G. Ntim ◽  
John Malagila ◽  
Samuel Fosu ◽  
Abongeh A. Tunyi
Keyword(s):  
Capital Structure ◽  
Least Squares ◽  
Fixed Effects ◽  
Ordinary Least Squares ◽  
Moderating Effect ◽  
Board Diversity ◽  
Content Type ◽  
The Impact ◽  
New Evidence ◽  
The Relationship

PurposeThis paper aims to investigate the association among trustee board diversity (TBD), corporate governance (CG), capital structure (CS) and financial performance (FP) by using a sample of UK charities. Specifically, the authors investigate the effect of TBD on CS and ascertain whether CG quality moderates the TBD–CS nexus. Additionally, the authors examine the impact of CS on FP and ascertain whether the CS–FP nexus is moderated by TBD and CG quality.Design/methodology/approachThe authors use a number of multivariate regression techniques, including ordinary least squares, fixed-effects, lagged-effects and two-stage least squares, to rigorously analyse the data and test the hypotheses.FindingsFirst, the authors find that trustee board gender diversity has a negative effect on CS, but this relationship holds only up to the point of having three women trustees. The authors find similar, but relatively weak, results for the presence of black, Asian and minority ethnic (BAME) trustees. Second, the authors find that the TBD–CS nexus depends on the quality of CG, with the relationship being stronger in charities with higher frequency of meetings, independent CG committee and larger trustee and audit firm size. Third, the authors find that CS structure has a positive effect on FP, but this is moderated by TBD and CG quality. The evidence is robust to different econometric models that adjust for alternative measures and endogeneities. The authors interpret the findings within explanations of a theoretical perspective that captures insights from different CG and CS theories.Originality/valueExisting studies that explore TBD, CG, CS and FP in charities are rare. This study distinctively attempts to address this empirical lacuna within the extant literature by providing four new insights with specific focus on UK charities. First, the authors provide new evidence on the relationship between TBD and CS. Second, the authors offer new evidence on the moderating effect of CG on the TBD-CS nexus. Third, the authors provide new evidence on the effect of CS on FP. Finally, the authors offer new evidence on the moderating effect of TBD and CG on the CS–FP nexus.

The moderating effect of industry clockspeed on Lean Manufacturing implementation in Zimbabwe

2019 ◽  
Vol 32 (2) ◽  
pp. 288-304
Author(s):  
Catherine Maware ◽  
Olufemi Adetunji
Keyword(s):  
Structural Equation Model ◽  
Lean Manufacturing ◽  
Structural Equation ◽  
Equation Model ◽  
Moderating Effect ◽  
Operational Performance ◽  
Content Type ◽  
Industry Clockspeed ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to analyze the moderating impact of industry clockspeed (IC) on the relationship between Lean Manufacturing (LM) practices and operational performance. A model for evaluating the impact of LM is developed and the moderating effect of IC is taken into consideration as a fundamental variable that affects the causal relationship between LM practices and operational performance. Design/methodology/approach A structural equation model was proposed and investigated across two groups based on IC level (Group 1: low IC and Group 2: high IC). A structured survey questionnaire was used to collect empirical data from 600 companies listed by the Confederation of Zimbabwean Industries. A total of 214 usable questionnaires were obtained giving a response rate of 35.6 percent. The data were analyzed using Smart PLS 3 and SPSS version 25. Findings The results revealed that LM practices directly and positively affected operational performance and IC had a positive moderation effect on the relationship between LM practices and operational performance. The results indicated that the structural equation model remained invariant across the groups. This showed that IC had a moderating effect on the relationship between LM practices and operational performance for both low IC and high IC industries. Originality/value The study analyzed the moderating effect of IC in Zimbabwean industries. The study will provide further evidence to managers on the impact of LM practices on operational performance in developing countries.

The growth-profitability nexus among Swedish SMEs

2015 ◽  
Vol 11 (4) ◽  
pp. 531-547 ◽  
Author(s):  
Darush Yazdanfar ◽  
Peter Öhman
Keyword(s):  
Financial Management ◽  
Fixed Effects ◽  
Firm Growth ◽  
Management Practices ◽  
Control Variable ◽  
Sustainable Growth ◽  
Least Squares Regression ◽  
Level Control ◽  
Firm Level ◽  
Content Type

Purpose – The purpose of this paper is to examine the growth-profitability nexus among small- and medium-sized enterprises (SMEs). Design/methodology/approach – The data comprise 106,884 observations covering 26,721 Swedish SMEs in six industry sectors over the 2008-2011 period. The data were analysed using several statistical techniques, including two-stage least squares regression, fixed-effects and random regressions, and bootstrapped quantile regression. Findings – Consistent with the hypotheses derived from the resource-based approach, the results indicate that current profitability significantly and positively affects firm growth. The firm-level control variable size significantly and positively affects firm growth, though firm age significantly and negatively affects growth. Firm industry affiliation also affects firm growth. Research limitations/implications – Since SME performance is commonly equated with access to knowledge, consultancy services or business training programmes sponsored by governmental organizations can help SMEs improve their management skills and thereby their performance. Moreover, adopting advanced financial management practices can improve the use of financial resources, leading to higher profitability and thereby sustainable growth. This implies that managers should change their strategy from “growth now, profitability later” to “profitable growth now”. Originality/value – Unlike most previous studies, this study employs several multivariate methods to analyse a comprehensive, cross-sectoral sample comprising non-financial, independent, and active SMEs in several industries. This study focuses explicitly on SMEs, which play a fundamental role in the Swedish economy.

Environmental disclosure quality and risk: the moderating effect of corporate governance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zabihollah Rezaee ◽  
Mohammad Alipour ◽  
Omid Faraji ◽  
Mehrdad Ghanbari ◽  
Babak Jamshidinavid
Keyword(s):  
Corporate Governance ◽  
Fixed Effects ◽  
Social Performance ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Firm Risk ◽  
Disclosure Quality ◽  
Environmental Disclosure ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this article is to investigate the relationship between environmental disclosure quality (EDQ) and risk and to further examine whether corporate governance (CG) practices moderate this relationship. Design/methodology/approach This study uses a set of unique, hand collected data (from 2011 to 2016) to measure EDQ for a sample of 762 firm-years Iranian listed companies. Ordinary least squares regression analysis is performed in testing hypotheses after controlling for a variety of firm, industry and year effects. Moreover, several analyses are performed to establish the robustness of the findings. Findings The results indicate a negative association between EDQ and firm risk. While board independence moderates this relationship, other CG practices such as CEO duality and board size do not show any effects on the relationship between EDQ and risk. The results remain robust after performing sensitivity tests and under various specifications, including the fixed-effects panel data and Heckman two-stage regressions. Research limitations/implications Results are from a sample of firms from one country. Practical implications The results have implications for policymakers, legislators and corporate executives, as environmental initiatives are gaining more attention worldwide. Social implications Sustainability initiatives in the areas of environmental and social performance and disclosure are gaining global attention. This study addresses the link between firm risk and EDQ. Originality/value This study contributes to the literature by shedding light on the relationship between corporate risk-taking and EDQ in the context of a developing economy.

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