External and internal determinants of performances of Shariah and non-Shariah compliant firms

2019 ◽  
Vol 12 (2) ◽  
pp. 236-253 ◽  
Author(s):  
Catherine S.F. Ho ◽  
Nor Erna Nabila Mohd-Raff
Keyword(s):  
Firm Performance ◽  
Financial Distress ◽  
Firm Heterogeneity ◽  
Relevant Information ◽  
Firm Characteristics ◽  
Term Survival ◽  
Content Type ◽  
Panel Data Regression ◽  
New Findings ◽  
And Performance

Purpose This study aims to provide comprehensive models that investigate the combination of both external fundamentals and internal characteristics on firm performance and if there is any difference between Shariah and non-Shariah compliant firms. The objective of this paper therefore is to analyze the significant relation between external fundamentals, internal characteristics and firm performance. Design/methodology/approach Panel data regression analyses are applied to determine significant results. It helps to control for unobserved factors of firm heterogeneity, which may result in spurious regression. Findings Most internal firm characteristics are found to be significant, but the same cannot be said for external fundamentals. Firm size is found to be very significant in driving both sets of firm performances. Financial distress in term of higher level of leverage is found to be a negative driver of non-Shariah-compliant firms’ performance in terms of return on asset but not for Shariah firms consistent with Islamic finance understanding. Shariah-compliant firms with higher liquidity tend to perform much better than less liquid firms, but the same is not found for non-Shariah-compliant ones. Research limitations/implications This study is limited to the industrial production sector and compares both Shariah and non-Shariah compliant firms. Practical implications This study adds new findings to clarify the roles of external macroeconomic fundamentals and internal characteristics determinants on firm performance. Findings from this study combine relevant information on different sets of determinants on firm performance and produce empirical evidence beneficial to both sets of Shariah and non-Shariah compliant firms in the industry. Originality/value This paper fulfills the need for firms to understand the external and internal environment for continuous survival and performance. It is therefore important for firms to recognize the possible factors which may influence their performance and mechanisms to sustain their performance for long-term survival.

scholarly journals How does directors’ remuneration affect SMEs’ performance?

2018 ◽  
Vol 17 (2) ◽  
pp. 238-258 ◽  
Author(s):  
Godfred Adjappong Afrifa ◽  
Oluseyi Oluseun Adesina
Keyword(s):  
Firm Performance ◽  
Optimal Level ◽  
Optimal Point ◽  
Content Type ◽  
Panel Data Regression ◽  
Data Regression ◽  
Medium Enterprise ◽  
And Performance ◽  
The Relationship ◽  
Benefits And Costs

Purpose The purpose of this paper is to empirically explain the relationship between the remuneration levels of a sample of listed small and medium enterprise (SME) directors and firm performance. The paper also investigates whether deviations from the optimal directors’ remuneration level reduces firm performance. Design/methodology/approach The study uses a panel data regression analysis of 802 AIM-listed SMEs over an eight-year period (2005-2012). Findings Using a non-linear approach, the results show that an optimum director’s remuneration level is calculated by comparing the benefits and costs of director’s remuneration. Hence, the paper not only shows how directors’ remuneration level affects firm performance but it also extends the stream of knowledge by indicating how a deviation from the optimal point influences UK-listed SME performances. Moreover, the results show that the effect of directors’ remuneration on firm performance is greater during a financial crisis period. Originality/value Compared with previous literature on directors’ remuneration, this paper focuses on AIM-listed SMEs, and the author’s finding of a concave relationship between directors’ remuneration level and performance of leads them to recommend that firms, especially SMEs, should endeavour to determine the optimal level of directors’ remuneration to maximise performance.

Corporate governance practices and firm performance: a configurational analysis across corporate life cycles

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hala M. Amin ◽  
Ehab K.A. Mohamed ◽  
Mostaq M. Hussain
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Analytical Approach ◽  
Research Study ◽  
Performance Outcomes ◽  
Life Cycles ◽  
Related Activity ◽  
Content Type ◽  
And Performance ◽  
Country Specific

Purpose This study aims to explore corporate governance (CG) practices that can lead to firms’ better performance in different organizational life cycles. The authors propose a configurational approach to explore how a set of CG practices combine in bundles to achieve high performance outcomes for firms across their corporate life cycles. Design/methodology/approach Fuzzy-set qualitative comparative analysis was used to analyze a sample of data of 21 countries and 9 industries. Data referred to the period of 9 years extending from the year 2005 to the year 2013. Findings This study reveals that there are multiple CG practices that exist through firms that can achieve high firm performance. Moreover, CG practices combine in different ways for firms in their growth, maturity and declining stages. Research limitations/implications This study demonstrates the value of using a configurational analytical approach to explore both the firm and country-specific CG practices (together) that engage firms to achieve the desired level of performance across the corporate life cycles. Practical implications The current study draws attention to the policymakers’ need to assess the current level of regulatory and competitive development of their countries and form policy accordingly. The approach used in the current research study not only offers the linkages between CG and performance to managers as incentives to comply with regulation but also to view CG-related activity as a strategic move. Social implications The approach used in the current research study not only offers the linkages between CG and performance to managers as incentives to comply with regulation but also to view CG-related activity as a strategic move. Originality/value This study broadening the focus of CG studies to include a rigorous explanation of the global CG phenomena and to provide effective solutions for the practitioners. Contribution to Impact This study demonstrates the value of using a configurational analytical approach to explore both the firm and country-specific CG practices (together) that engage firms to achieve the desired level of performance across the corporate life cycles.

scholarly journals Conflict-induced forced CEO turnover and firm performance

2018 ◽  
Vol 44 (9) ◽  
pp. 1134-1154
Author(s):  
Kuntara Pukthuanthong ◽  
Saif Ullah ◽  
Thomas J. Walker ◽  
Jing Zhang
Keyword(s):  
Firm Performance ◽  
Univariate Analysis ◽  
Ceo Turnover ◽  
Main Role ◽  
Corporate Boards ◽  
Firm Characteristics ◽  
Stock Performance ◽  
Content Type ◽  
Strategic Direction ◽  
The Board Of Directors

Purpose The purpose of this paper is to examine operational and stock performance changes around forced CEO turnovers caused by conflicts between corporate boards and CEOs over the strategic direction of the firm. In addition, the authors investigate whether changes in performance can be explained by board, CEO, or firm characteristics. Design/methodology/approach The authors apply propensity score matching to choose matching firms that do not forced CEO turnover but have similar characteristics with the sample firms. The authors compare their operating and stock performances. The authors apply both univariate analysis and multivariate regression analyses. Findings The authors find that the CEO turnovers caused by conflicts between corporate boards and CEOs over the strategic direction of the firms tend to be preceded by significant declines in a firm’s operating and stock performance and that corporate performance improves after turnovers. In addition, the authors find that an increase in long-term incentives and firm size and a decrease in turnover improve firm performance. Originality/value While the existing corporate governance literature emphasizes oversight as the main role of the board of directors and identifies the CEO as the leader who sets the strategic direction of the firm, in cases of conflict-induced forced CEO turnover, it is the board that sets the strategic direction. This paper is the first to provide evidence regarding the implications of conflict-induced forced CEO turnovers.

Board diversity and performance in a masculine, aged and glocal supply chain: new empirical evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Giuseppe Giulio Calabrese ◽  
Alessandro Manello
Keyword(s):  
Supply Chain ◽  
Firm Performance ◽  
Empirical Evidence ◽  
Linear Models ◽  
Data Set ◽  
Board Diversity ◽  
Content Type ◽  
Automotive Supply Chain ◽  
And Performance ◽  
Automotive Supply

Purpose This study aims to contribute to the debate on the relationship between board diversity and performance, a hot topic for scholars and shareholders. A number of studies have found contrasting impacts of board diversity on firm performance and this paper adds new and original evidence in the context of the automotive supply chain focusing on gender, age and nationality diversity. Design/methodology/approach The authors propose a triple stage empirical analysis. First, the authors use linear models according to different performance indexes for investigating diversity (gender, age and nationality) within the board of directors and executives. Second, the authors investigate the issue of diversity in different contexts such as position in the supply chain, nationality of the owner and family/corporate ownership. Finally, the authors use non-linear models to find a better combination of diversity in terms of gender and nationality for retrieving some managerial implications. Findings First, the authors demonstrate a robust positive effect of women in board representation on firm performance in terms of profitability and firm risk. In the case of, age and nationality the results are more equivocal in particular for the former. Second, the authors depict board diversity in different contexts as follows: positioning in the supply chain, type and nationality of the final owner. Again, gender heterogeneity is more adequate in the complex firm as Tier 1 suppliers, corporate and foreign company. Originality/value The authors focused the analysis on a specific industry, shedding light on the main specificities linked to operating in certain phases of the supply chain, a substantial novelty in this field. The empirical evidence is based on a very large data set containing quantitative and qualitative information on a representative sample of 1,538 firms operating in the Italian automotive supply chain, one of the most relevant in Europe.

Do women perform better in family firms?

2017 ◽  
Vol 29 (3) ◽  
pp. 299-315 ◽  
Author(s):  
Antonio D’Amato
Keyword(s):  
Firm Performance ◽  
Family Firms ◽  
Gender Diversity ◽  
Family Firm ◽  
Campania Region ◽  
Content Type ◽  
Novel Approach ◽  
Panel Data Regression ◽  
Moderating Role

Purpose Empirical evidence on the relation between female involvement at the head of a company and firm performance remains inconclusive. This study aims to disentangle the existing evidence by exploring the moderating role of family firm status. Design/methodology/approach The study analyzes the moderating role of family firm status on the relation between gender diversity and firm performance among a sample of 88 Italian wine firms from Campania region during the 2007-2014 period. This work uses random effects panel data regression and tests the robustness of the results using alternative econometric techniques. Performance is measured in terms of profitability. Findings The findings reveal that women in top positions do not affect firm performance. However, it is found that this relation is significantly moderated by family firm status. Specifically, compared to high family-controlled firms, female involvement negatively impacts firm performance in low family-controlled firms. Research limitations/implications From a theoretical standpoint, the results enable a more nuanced interpretation of the relationship between female involvement and firm performance. From a managerial perspective, the results highlight conditions that may promote the role of women in business. Originality/value This paper provides insights into the relation between gender diversity and firm performance by exploring the moderating role of family firm status – a novel approach in the management and wine business literature.

The impact of institutional voids on risk and performance in base-of-the-pyramid supply chains

2020 ◽  
Vol 31 (4) ◽  
pp. 829-863
Author(s):  
Attique ur Rehman ◽  
Muhammad Shakeel Sadiq Jajja ◽  
Raja Usman Khalid ◽  
Stefan Seuring
Keyword(s):  
Supply Chain ◽  
Firm Performance ◽  
Product Market ◽  
Base Of The Pyramid ◽  
Institutional Voids ◽  
Supply Chain Risk ◽  
Content Type ◽  
And Performance ◽  
Bop Markets ◽  
Supply Chain Risks

PurposeBase-of-the-pyramid (BoP) markets are frequently characterized by institutional voids. However, it remains unclear how institutional voids impact corporate and supply chain risk and performance. This intersection will be analyzed in this paper.Design/methodology/approachThis paper presents a systematic literature review of 94 BoP papers published between 2004 and 2019 in peer-reviewed, English-language journals available on Scopus. Drawing upon established frameworks for examining institutional voids, supply chain risks and BoP performance, frequency, and contingency analyses are conducted. Contingencies are established to provide insights into the associations between different constructs from the selected frameworks.FindingsSupply chain risks are pervasive in the BoP discourse, especially when BoP markets are characterized by institutional voids. The frequency analysis of the constructs suggests that the key supply chain risks discussed in the BoP literature include social risk, credit risk, product market and operating uncertainties, knowledge and skill biases and decision-maker risks due to bounded rationality. The contingency analysis suggests that institutional voids are associated with supply chain risks that affect performance.Research limitations/implicationsA theoretical framework aligning three research streams in the context of BoP calls for future studies to test the causality of highlighted constructs that are significantly associated. The analysis is confined to the constructs that are taken into account based on specific conceptual frameworks.Practical implicationsThe study provides practitioners with a framework to manage supply chain risks in BoP-related firms to enhance firm performance. Managers can use key dimensions of supply chain risk, such as the product market, the input market and operating uncertainties, to evaluate performance in the BoP context.Originality/valueSpecifically, this research has strengthened the inquiry of supply chain risks in the presence of institutional voids that may have an impact on firm performance

The impact of service innovation on firm performance: a meta-analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Changli Feng ◽  
Ruize Ma ◽  
Lin Jiang
Keyword(s):  
Firm Performance ◽  
Positive Impact ◽  
Meta Analysis ◽  
Service Innovation ◽  
Future Research ◽  
Quantitative Review ◽  
Content Type ◽  
And Performance ◽  
The Impact ◽  
The Relationship

PurposeWith the rise of service economy, many companies are attempting to gain a competitive advantage through service innovation. However, the existing research has not drawn consistent conclusions about the relationship between service innovation and firm performance. Hence, the purpose of this paper is to provide a quantitative review on the service innovation-performance relationship based on research findings reported in the extant literature.Design/methodology/approachStudies from 46 peer-reviewed articles were sampled and analyzed. A meta-analytic approach was adopted to conduct a quantitative review on the relationship between service innovation and firm performance, and the effects of any potential moderators were further explored.FindingsThe results found that service innovation has a significant positive impact on firm performance. Additionally, the relationship between service innovation and firm performance is influenced by measurement moderators (economic region and performance measurement), and contextual moderators (firm type, innovation type, customer factors and attitudes toward risk).Originality/valueThe meta-analysis has been used to explore the relationship between service innovation and firm performance, and the findings have contributed to the literature on service innovation, as well as providing future research directions.

The role of internationalization in entrepreneurial orientation-performance link: empirical study of SMEs in a developing nation perspective

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zaynab Dadzie ◽  
Ahmed Agyapong ◽  
Abdulai Suglo
Keyword(s):  
Firm Performance ◽  
Empirical Study ◽  
Entrepreneurial Orientation ◽  
Developing Nation ◽  
Content Type ◽  
Mediating Role ◽  
And Performance ◽  
The Impact ◽  
The Relationship

Purpose This study aims to examine the mediating role of internationalization in the relationship between the dimensions of entrepreneurial orientation (EO) and performance, empirical study of small and medium scale enterprises (SMEs) in a developing nation. Design/methodology/approach The study uses a sample of 158 exporting SMEs based in the sub-Saharan developing economy, Ghana. The use of hierarchical regression (ordinary least square analysis) was used by the researcher to assess the suggested model of the study. Findings Largely supporting the conjectural predictions, the study indicates that EO positively and significantly influences performance; internationalization fully mediates the relationship between innovativeness and performance of export firms; internationalization fully mediates the relationship between risk-taking and performance of export firms; and finally, internationalization partially mediates the relationship between competitive aggressiveness and performance of export firms. Managers are, therefore, encouraged to strategically develop both their EO and internationalization, as the study has confirmed that EO has both a direct and indirect relationship with performance. Originality/value This study integrated a resource-based view of the firm and international entrepreneurship theory as a theoretical foundation. Theoretically, internationalization’s mediating role reveals the relevance of this construct in the linkage between entrepreneurial orientation and firm performance. Furthermore, the study extends the entrepreneurial orientation concept to the international business literature by estimating and testing models of the mediating link between entrepreneurial orientation and performance. Moreover, the study seeks to broaden the knowledge of entrepreneurial orientation and its relationship with performance in small and medium businesses. The study further extends the limited studies on performance, driven by entrepreneurial orientation and internationalization in a developing nation (Ghanaian) context. This paper besides seeks to highlight the impact of entrepreneurial orientation on performance when channeled through internationalization. The study also reveals the dimensions of entrepreneurial orientation to be important antecedents of internationalization, in attempts at unearthing the critical predictors of firm performance, especially those of international characteristics.

The effects of corporate governance on financial performance and financial distress: evidence from Egypt

2015 ◽  
Vol 15 (5) ◽  
pp. 641-662 ◽  
Author(s):  
Tamer Mohamed Shahwan
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Performance ◽  
Financial Distress ◽  
Emerging Market ◽  
Negative Relationship ◽  
Positive Association ◽  
Time Frame ◽  
Content Type

Purpose – This paper aims to empirically examine the quality of corporate governance (CG) practices in Egyptian-listed companies and their impact on firm performance and financial distress in the context of an emerging market such as that of Egypt. Design/methodology/approach – To assess the level of CG practices at a given firm, the current study constructs a corporate governance index (CGI) which consists of four dimensions: disclosure and transparency, composition of the board of directors, shareholders’ rights and investor relations and ownership and control structure. Based on a sample of 86 non-financial firms listed on the Egyptian Exchange, the effects of CG on performance and financial distress are assessed. Tobin’s Q is used to assess corporate performance. At the same time, the Altman Z-score is used as a financial distress indicator, as it measures financial distress inversely. The bigger the Z-score, the smaller the risk of financial distress. Findings – The overall score of the CGI, on average, suggests that the quality of CG practices within Egyptian-listed firms is relatively low. The results do not support the positive association between CG practices and financial performance. In addition, there is an insignificant negative relationship between CG practices and the likelihood of financial distress. The current study also provides evidence that firm-specific characteristics could be useful as a first-pass screen in determining firm performance and the likelihood of financial distress. Research limitations/implications – The sample size and time frame of our analysis are relatively small; some caution would be needed before generalizing the results to the entire population. Practical implications – The findings may be of interest to those academic researchers, practitioners and regulators who are interested in discovering the quality of CG practices in a developing market such as that of Egypt and its impact on financial performance and financial distress. Originality/value – This paper extends the existing literature, in the Egyptian context in particular, by examining firm performance and the risk of financial distress in relation to the level of CG mechanisms adopted.

Family firms, family generation and performance: evidence from an emerging economy

2014 ◽  
Vol 4 (2) ◽  
pp. 197-219 ◽  
Author(s):  
Mohammad Badrul Muttakin ◽  
Arifur Khan ◽  
Nava Subramaniam
Keyword(s):  
Firm Performance ◽  
Family Firms ◽  
Emerging Market ◽  
Emerging Economy ◽  
Family Ownership ◽  
Content Type ◽  
Generation Family ◽  
And Performance ◽  
The Impact ◽  
Better Than

Purpose – The purpose of this paper is to examine the impact of family ownership on firm performance. In particular the authors investigate whether family firms outperform non-family firms and whether first generation family firms perform better than second generation family firms in an emerging economy using Bangladesh as a case. Design/methodology/approach – This study uses a data set of 141 listed Bangladeshi non-financial companies for the period 2005-2009. The methodology is based on multivariate regression analysis. Findings – The result shows that family firms perform better than their non-family counterparts. The authors also find that family ownership has a positive impact on firm performance. The analysis further reveals intergenerational differences where family firms and performance are associated positively only when founder members act as CEOs or chairmen. However, when descendents serve as CEOs or chairmen family firms are associated with poorer firm performance. Originality/value – The authors extend the findings of previous studies that investigate the family ownership and firm performance relationship in developed economy settings, but neglected emerging economies. The study also informs the literature about the intergenerational impact of family firms on performance in an emerging market.

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