Measuring innovation effectiveness: a SEM-based cross-lagged analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tahseen Anwer Arshi ◽  
Venkoba Rao ◽  
Sumithra Viswanath ◽  
Vazeerjan Begum
Keyword(s):  
Organizational Performance ◽  
Evolutionary Dynamics ◽  
Emerging Market ◽  
Performance Outcomes ◽  
Equation Modeling ◽  
Emerging Market Economies ◽  
Strategic Choices ◽  
Content Type ◽  
Market Economies ◽  
Nonfinancial Performance

Purpose The study aims to develop measures for innovation effectiveness impacting organizational performance outcomes. Substantial evidence suggests that measuring innovation effectiveness (IE) continues to be challenging because of the use of different measures across innovation’s broad spectrum. The purpose of this study is to overcome it by examining multiple drivers of IE in emerging market economies (EMEs) and predicting their impact on financial and nonfinancial performance outcomes. Design/methodology/approach Through a two-wave panel design, firms from India, Oman and the United Arab Emirates participated in the study with a time lapse of 12 months (T1n = 417, T2n = 403). Four cross-lagged competing models are tested for autoregressive, causal, reversed and reciprocal effects using structural equation modeling (SEM). Findings The findings show that the synergistic effect of multiple innovation characteristics, such as innovation degree, cost, frequency and speed determines its endogenous effectiveness. The exogenous effectiveness of innovation is further established through its impact on financial and nonfinancial performance outcomes. Furthermore, readiness for innovation (RFI) is a critical factor that moderates the relationship between drivers and IE. Practical implications The study’s findings could inform practitioners in emerging market economies about the appropriate measures of IE. It will guide managerial decisions on making an investment, evaluation, accountability and strategic choices related to innovation. Originality/value It is one of the first studies that use a time-based lens to examine IE in EMEs. It posits that given the innovation’s complexity, IE needs to be measured at multiple levels. The study explains how evolutionary dynamics in different sociocultural contexts can bring a new perspective into theory of diffusion of innovation. The moderating role of RFI brings new insights into the IE process and emphasizes its importance in objective-driven and performance-focused innovation efforts.

The impacts of income inequality on the gross domestic product under direct taxation: evidence from emerging market economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ahmet Eren Yıldırım ◽  
Mete Dibo
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Income Inequality ◽  
Gross Domestic Product ◽  
Emerging Market ◽  
Domestic Product ◽  
Emerging Market Economies ◽  
Content Type ◽  
Market Economies ◽  
Direct Taxation

PurposeThis study analyzes the impacts of income inequality after direct taxation on the gross domestic product as a fiscal policy tool in the development process.Design/methodology/approachThe model of the study is based on Munielo-Gallo and Roca-Sagales (2013), which examined the fiscal policy, income inequality and economic growth simultaneously. The study uses two models to analyze the relationship between income inequality and gross domestic production under direct taxation by employing autoregressive distributed lag (ARDL) model for selected emerging market economies.FindingEmpirical results reveal a negative long-run relationship between variables in some countries in line with the literature, despite a positive relationship in others. Moreover, the results exhibit the negative impact of income inequality after direct taxation on the gross domestic product decreases.Originality/valueResults of the study highlight the importance of direct taxation on income inequality concerning the reflects on economic growth. It suggests that when the income distribution is fairer, it may positively affect the gross domestic product. The study provides a new perspective to the related literature by investigating the role of income inequality under direct taxation for gross domestic product.

Financial liberalization and the behavior of reversals in emerging market economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ali Fayyaz Munir ◽  
Shahrin Saaid Shaharuddin ◽  
Mohd Edil Abd Sukor ◽  
Mohamed Albaity ◽  
Izlin Ismail
Keyword(s):  
Emerging Markets ◽  
Financial Liberalization ◽  
Emerging Market ◽  
Asia Pacific ◽  
Emerging Market Economies ◽  
Investment Strategies ◽  
Content Type ◽  
Market Economies ◽  
Contrarian Strategy ◽  
Fund Managers

PurposeThis paper investigates the behavior of contrarian strategy payoffs under varying degrees of financial liberalization in the context of Asia-Pacific emerging market namely China, India, Indonesia, Korea, Malaysia, Pakistan, Philippines and Thailand for the period 1997–2017. These markets represent economies that display a gradual change in the degree of financial liberalization instead of fully opening their markets to foreign investors at once.Design/methodology/approachUsing a daily dataset of 2,468 firms and four different measures of the degree of financial liberalization, the paper employs portfolio formation, panel regressions and binary modeling methods to reveal the impact of partial and complete financial liberalization on contrarian returns.FindingsThis paper documents a negative relationship between the degree of financial liberalization and contrarian strategy payoffs. The results further indicate that small-sized emerging markets reveal more significant and higher contrarian returns as compared to their larger counterparts. Moreover, the returns are significantly higher during negative market states, higher volatility and crises periods. The study findings are consistent with the investor-base broadening hypothesis.Practical implicationsThe findings may serve as a useful input for investors and fund managers to devise contrarian investment strategies in emerging market economies. Together, the study provides additional insights for policymakers in managing financial liberalization and integration policies within their respective countries.Originality/valueThis study provides a novel viewpoint by examining the relationship between the degree of financial liberalization and contrarian strategy payoffs. The authors contribute to the existing debate by shifting the discussion to the investor-based broadening argument in which small and less liberalized emerging markets offer opportunities for investors and fund managers to produce abnormal contrarian returns that cannot be earned by other conventional investment strategies.

scholarly journals The integration between and common prosperity of government and market: China's experience of economic development

2020 ◽  
Vol 3 (2) ◽  
pp. 353-366
Author(s):  
Leming Hu
Keyword(s):  
Economic Development ◽  
Market Economy ◽  
Economic Transition ◽  
Emerging Market ◽  
Emerging Market Economies ◽  
Content Type ◽  
Market Economies ◽  
Economic Liberalism ◽  
Government And Market ◽  
The Relationship

PurposeThe relationship between government and market is the key to the economic development performance of market economy countries. Due to the limits such as the state/market dichotomy, the focus on static allocation efficiency and the ignorance of the diversity of the market economy and the relationship between government and market, economic liberalism and state interventionism can hardly position and explain the role and evolution of government and market in the real world accurately.Design/methodology/approachChina’s economic transition has always adhered to the reform direction of the socialist market economy and the development goal of a modern socialist country as well as the symbiosis and positive and progressive evolution of government and market, blazing a “third way” in handling the relationship between government and market.FindingsThe “China’s experience” shows that the key for emerging market economies to achieve good economic development performance lies in whether they can build a new relationship of the mutual integration between and common prosperity of government and market regarding target selection, production organisation, technological innovation, institutional change and regulatory adjustment.Originality/valueThe second part of this paper analyses the inherent defects of economic liberalism and state interventionism as well as the reasons why they can hardly be adopted as the theoretical guidance for emerging market economies to handle the relationship between government and market. The third part analyses how China has transcended the inherent thinking of liberalism and interventionism and shaped the new relationship between government and market through goal-oriented, active and progressive, two-way interactive exploration and practice to ensure the success of China's economic transition.

Innovative product marketing strategy: multinational companies in Bangladesh

2019 ◽  
Vol 13 (4) ◽  
pp. 656-671
Author(s):  
Maria Fregidou-Malama ◽  
Ehsanul Huda Chowdhury ◽  
Akmal S. Hyder
Keyword(s):  
Emerging Market ◽  
International Marketing ◽  
Multinational Companies ◽  
Emerging Market Economies ◽  
Local Market ◽  
Data Set ◽  
Content Type ◽  
Market Economies ◽  
Marketing Literature ◽  
Product Marketing

Purpose This paper aims to deal with international marketing of products, analyzing how adaptation/standardization and network development are achieved when marketing products in Bangladesh. Design/methodology/approach By applying a qualitative method, the study was conducted at four multinationals, British American Tobacco, Perfetti Van Melle, Tetrapak and Reckitt Benckiser, operating in Bangladesh. Data were collected through semistructured interviews, direct observation and official documents. The analysis was conducted through construction of themes that were identified from the data set. Findings The study demonstrates that business relationships related to a local market should be adapted to customer preferences. The research suggests that a balanced combination of product quality and development of new, innovative products adapted to the needs of the market and the customers establishes trust and networks. Cultural and market context were found to influence multinational companies (MNCs)s to standardize the quality of the products and adapt marketing mix components to the needs of consumers. Research limitations/implications The paper contributes to international marketing literature with a model of product marketing based on context, trust, networks and adaptation/standardization. The model introduces the cultural dimension of femininity/ masculinity and the innovation of products and market structure. The study is limited to one emerging market. Further studies should explore other emerging market economies and MNCs. Practical implications The results suggest that to meet the challenges of emerging market economies and achieve success, managers should take people and market needs into consideration. Originality/value This paper extends product marketing literature by presenting a context-based model for MNCs’ product marketing.

How entrepreneurial orientation translates social identities into performance

2019 ◽  
Vol 25 (7) ◽  
pp. 1433-1451 ◽  
Author(s):  
Leif Brändle ◽  
Stephan Golla ◽  
Andreas Kuckertz
Keyword(s):  
Entrepreneurial Orientation ◽  
Structural Equation ◽  
Performance Outcomes ◽  
Social Identities ◽  
Entrepreneurial Activity ◽  
Equation Modeling ◽  
Strategic Choices ◽  
Content Type ◽  
Upper Echelons Theory ◽  
Enterprise Community

Purpose Entrepreneurial orientation (EO) has been viewed almost exclusively through the lens of profit-driven firms. However, individuals engage in entrepreneurship not only for economic reasons but also to enrich a community or to advance society. Drawing on upper echelons theory, the purpose of this paper is to address this issue by proposing that founders’ social identities shape the strategic choices of their ventures. Design/methodology/approach Drawing on the data from 318 founders in the early stages of their entrepreneurial activity, the study applies partial least squares structural equation modeling to empirically test whether founders’ social identities influence their ventures’ EO. Findings The findings of the current research show that founders whose dominant purpose is the creation of value for others are more likely to launch ventures oriented toward innovation. On the other hand, ventures of founders driven by economic self-interest accept more risk, which leads to higher performance outcomes on the enterprise, community and societal levels. Originality/value The study enhances the EO discussion by adding social identity theory as a way to explain different levels of EO in firms and answers the call for more diversity in EO–performance measurement by applying specific outcomes on the enterprise, community and societal levels to investigate whether a firm’s EO leads to the desired outcomes.

The short- and long-lived effects of IFRS mandate on IPO firms in emerging market economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fouad Jamaani ◽  
Manal Alidarous
Keyword(s):  
Information Asymmetry ◽  
Initial Public Offering ◽  
Financial Reporting ◽  
Emerging Economies ◽  
Large Scale ◽  
Emerging Market ◽  
Secondary Market ◽  
Emerging Market Economies ◽  
Content Type ◽  
Market Economies

Purpose This study aims to examine the short- and long-lived effects of the International Financial Reporting Standards (IFRS) mandate on the quality of reporting information of initial public offering (IPO) firms in emerging market economies. Design/methodology/approach The study used several difference-in-differences models for a sample comprising 102 Saudi Arabian IPO firms for 2003–2017. Findings It found that mandating the application of the IFRS had a significant short-lived but no long-lived effect on IPO firms’ information asymmetry. When information asymmetry was high such as in the primary market, the IFRS succeeded in alleviating the underpricing of IPO firms. Conversely, in the secondary market, with negligible information asymmetry, the IFRS was not beneficial for the long-term performance of companies in the IPO market. Originality/value This study is the first of its kind in the emerging market context and has important implications for IPO investors and analysts, IFRS-IPO researchers and policymakers in emerging economies. The results empirically confirmed that the IFRS mandate had solely a short-lived effect and no long-lasting impact, on the problem of asymmetric information in the IPO market. The effectiveness of the IFRS in producing quality financial reporting is contingent upon large-scale information asymmetry and vanishes when investors and analysts have abundant information about listed firms, even for emerging economies such as Saudi Arabia.

scholarly journals A note on money creation in emerging market economies

2017 ◽  
Vol 9 (1) ◽  
pp. 70-85 ◽  
Author(s):  
Alexey Ponomarenko
Keyword(s):  
Emerging Markets ◽  
Financial Stability ◽  
Foreign Currency ◽  
Emerging Market ◽  
Emerging Market Economies ◽  
Special Focus ◽  
Ratio Requirement ◽  
Content Type ◽  
Market Economies ◽  
Money Creation

Purpose This paper aims to discuss the money creation mechanisms in emerging markets with special focus on external transactions and outlines the implications for monetary policy and financial stability issues. Design/methodology/approach To make the argument, the authors analyze a historical episode of flows of funds in Korea and Russia and conduct a canonical correlation analysis for a cross-section of emerging market economies. Findings The authors show that changes in the net foreign assets of the banking system are associated with (or cause) deposits fluctuations. In emerging markets, however, the scope of such fluctuations is limited unless driven by changes in the foreign reserves of a central bank. Originality/value Some preliminary implications for financial stability implementation may be drawn from this analysis. Introducing the net stable funding ratio requirement is unlikely to have any significant destabilizing effect on credit creation in emerging markets (in this regard, it is similar to the restriction on banks’ foreign currency position, which is a common prudential measure). Instead, it is likely to trigger a balance of payment adjustment that is similar to that experienced by an economy during its transition from fixed to flexible exchange rate regime.

How corruption affects loan portfolio quality in emerging markets?

2016 ◽  
Vol 23 (4) ◽  
pp. 769-785 ◽  
Author(s):  
Khemaies Bougatef
Keyword(s):  
Economic Development ◽  
Panel Data ◽  
Emerging Market ◽  
Emerging Market Economies ◽  
Loan Portfolio ◽  
Data Set ◽  
Content Type ◽  
Market Economies ◽  
Asset Quality ◽  
The Impact

Purpose The purpose of this paper is to empirically investigate the impact of corruption on the asset quality of banks operating in emerging market economies over the period 2008-2012. This issue is of crucial importance given the role of banking systems in economic development and the worldwide spread of corruption. Using panel data set of 22 countries, our findings provide a strong and robust support to the hypothesis according to which corruption aggravates the problem with non-performing loans. This evidence suggests that corruption may hinder economic development through the misallocation of loanable funds. Other results are as follows: economic expansion and capitalization level improve the loan portfolio quality. By contrast, unemployment deteriorates the debt servicing capacity of borrower which in turn contributes to lower the bank asset quality. Design/methodology/approach The authors use panel data techniques on a sample of 22 emerging market economies over the period 2008-2012 to test the relevance of corrupt practices on the soundness of banks. Findings Their findings reveal a robust positive relationship between corruption and non-performing loans (NPLs). This evidence corroborates previous results on the detrimental effect of corrupt practices on financial development. The subdivision of our main sample into two groups on the basis of the level of corruption reveals the importance of the effectiveness of collateral and bankruptcy laws in reducing the effect of corruption on loan portfolio. Moreover, we find that the accessibility to more credit information is helpful only in low corrupt countries since it enhances the soundness of banks by facilitating lending decisions. Originality/value The novelty of this paper is to take into consideration the implications of corruption in investigating the determinants of credit risk.

Narratives of environmental munificence of 3PL firms on the relationship between dynamic capabilities, strategic management and organizational performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Korhan Arun ◽  
Saniye Yildirim Ozmutlu
Keyword(s):  
Strategic Management ◽  
Organizational Performance ◽  
Structural Equation ◽  
Dynamic Capabilities ◽  
Performance Outcomes ◽  
Mediating Effect ◽  
Equation Modeling ◽  
Content Type ◽  
Environmental Munificence ◽  
The Relationship

PurposeThe purpose of this paper is to examine how the mediating effect of strategic management impacts the relationship between dynamic capabilities and firm performance concerning environmental munificence in 3rd party logistics (3PL) firms operating in Turkey.Design/methodology/approachVariance-based structural equation modeling algorithm and correlation analysis were applied to survey data obtained from (n = 482) a top manager from 3PL companies.FindingsResults revealed that dynamic capabilities were a strong predictor for organizational performance, environmental munificence also emerges as a key predictor for dynamic capabilities and strategic management, and strategic management fully mediates the link between dynamic capabilities and organizational performance, suggesting that they function as substitutes in affecting performance outcomes.Research limitations/implicationsThis paper provides empirical evidence of the relationship between the dynamic capability adaptation, strategic management, environment and performance of 3PL firms. As a limitation, the results are based on survey research with a limited sample size.Practical implicationsOrganizations should manage not only dynamism but also the scarcity of environmental resources found to be significant on both dynamic capabilities and strategic management. Additionally, in the logistics sector, managers should focus on the big picture while they empower and lead capable followers to transform this strategic view into operational-level changes.Originality/valueDepending on the relationships between constructs, studying environmental munificence is a different topic than the dynamic environment concept in the effectiveness of dynamic capabilities of 3PL firms. As well as dynamic capabilities at the level of individual and strategic management relationship on organization performance are confirmed.

A game-theoretical model of bank foreign direct investment strategy in emerging market economies

2014 ◽  
Vol 32 (3) ◽  
pp. 194-222 ◽  
Author(s):  
Aidan O’Connor ◽  
Francisco J. Santos-Arteaga ◽  
Madjid Tavana
Keyword(s):  
Theoretical Model ◽  
Emerging Market ◽  
Banking System ◽  
Financial System ◽  
Investment Strategy ◽  
Foreign Banks ◽  
Emerging Market Economies ◽  
Content Type ◽  
Market Economies ◽  
Game Theoretical Model

Purpose – The purpose of this paper is to propose a game-theoretical model for commercial bank foreign direct investment strategy, government policy and domestic banking industry interactions in emerging market economies and demonstrate the application of this strategy to the banking system. Government policy and domestic banking industry interactions in emerging market economies and demonstrate the application of this strategy to the banking system. Design/methodology/approach – The paper develops a game-theoretical model to analyze the optimality of the limiting entry strategy followed by a given domestic institutional sector when considering the entry applications of foreign banks in the domestic financial system. The model analyzes the strategic options available to an emerging market country with a relatively underdeveloped banking system when deciding whether or not and to what extent allow for the entrance of better reputed and more technologically advanced foreign banks in its domestic financial system. Findings – The paper shows that the progressive liberalization of entry restrictions would define the perfect Bayesian equilibria of the subsequent set of continuation games and the respective payoffs derived from this liberalization as the domestic economy integrates and competes within the global financial system. Originality/value – Banks operating in the international financial market have incentives to invest directly in emerging market economies and governments have incentives in allowing foreign banks entry to their market. As banking systems in these economies are generally underdeveloped, opening the financial system to foreign competitors could lead to a decrease in the market share of local banks. Eventually foreign banks could control the banking system and could de facto control the money supply.

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