Resource indivisibility, lumpy costs and the multinationality–performance relationship

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ohad Ref ◽  
Itzhak Gnizy
Keyword(s):  
Optimal Level ◽  
Firm Resources ◽  
Multiple Wave ◽  
Vast Number ◽  
Content Type ◽  
Geographic Scope ◽  
Single Pattern ◽  
And Performance ◽  
The Relationship ◽  
Benefits And Costs

PurposeThe relationship between multinationality and firm performance is a central issue in the international marketing and business literatures. Predominantly, this body of research has tried to identify a single, generalized pattern for this relationship. However, despite the vast number of studies, results have been characterized as mixed or inconsistent. In this study, we take a fresh look at this relationship.Design/methodology/approachWe focus on a key inducement to expand firm multinationality – the search for a more efficient way to exploit firm resources, and also on a specific operationalization of multinationality – firm geographic scope. We use a formal analytical model analyzing the trade-off between benefits and costs arising from expanding firm geographic scope and emphasizing the role of lumpy costs emanating from resource indivisibility.FindingsThe relationship between geographic scope and performance cannot be confined to a single pattern, but instead, may have any one of a set of patterns: negatively monotonic shape, inverted U-shape, S-shape, M-shape or, multiple-wave inverted U-shape.Practical implicationsThe current study offers managers some guidelines to identify which of the above patterns fits their firm's specific case, and to identify the optimal level of geographic scope for their firm.Originality/valueWe conclude that the search for a single, generalized pattern for multinationality-performance is largely futile, whereas the focus on specific inducements and operationalizations for multinationality allows us to explain when and why specific patterns are more likely to occur.

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.

Influence of family ownership on company performance

2016 ◽  
Vol 12 (5) ◽  
pp. 654-672 ◽  
Author(s):  
Ilse Maria Beuren ◽  
Leandro Politelo ◽  
José Augusto Sousa Martins
Keyword(s):  
Family Involvement ◽  
Optimal Level ◽  
Graphical Analysis ◽  
Family Ownership ◽  
Company Performance ◽  
Family Participation ◽  
Content Type ◽  
The Board Of Directors ◽  
And Performance ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between family ownership and the performance of Brazilian companies listed on BM&FBovespa. It also provides a comparison with the results of Shyu’s (2011) survey conducted in Taiwanese companies. Design/methodology/approach A sample of 187 Brazilian companies were surveyed, of which 120 were classified as family owned, considering the family participation in the capital and in the board of directors. As in Shyu’s (2011) study, three variables of performance, two of accounting and one of market, and seven variables of control were considered. Simultaneous equations were used to analyze the relationship between family participation and corporate performance, the test of mean was used to compare performance and other variables between family- and non-family-owned companies, and a graphical analysis was used to verify the extent to which family involvement contributes to better performance. Findings The results show that family-owned companies have lower performance compared with non-family-owned companies. They indicate a positive relationship between family participation (ownership) and performance of the company. They also reveal that the performance of family-owned companies is maximized when family involvement reaches 60 and 70 percent. Originality/value The survey conducted on Brazilian companies shows results that are partially consistent with those observed by Shyu (2011) in Taiwanese companies. Similarities were found in the relationship between family involvement and the performance of the company. However, the results differ with regard to the performance of family- and non-family-owned companies and the optimal level of family participation that can maximize performance.

scholarly journals A critical perspective on the measurement of performance in the empirical multinationality and performance literature

2017 ◽  
Vol 13 (2) ◽  
pp. 94-118 ◽  
Author(s):  
Nicole Franziska Richter ◽  
Robert Schmidt ◽  
Tina Jessica Ladwig ◽  
Fabian Wulhorst
Keyword(s):  
Performance Measures ◽  
Empirical Studies ◽  
Future Research ◽  
Content Type ◽  
Research Designs ◽  
Financial Performance Measures ◽  
And Performance ◽  
The Relationship ◽  
Benefits And Costs

Purpose This paper aims to contribute to the core research in international business (IB), namely, the relationship between multinationality and performance and is concerned with the quality of past empirical research designs. Design/methodology/approach On the basis of 49 studies, given in a literature review, the match between performance measures used in empirical studies and the underlying theoretical streams that explain the effects on benefits and costs of multinationality is critically evaluated. Findings Findings indicate that authors still largely rely on overall financial performance measures. Theoretical arguments, in contrast, refer to specific benefit and cost positions that might be better reflected in operational performance indicators. The idiosyncratic choice of the performance measures used might contribute to the varying results in past studies. Originality/value Suggestions for improving future research designs are offered.

How do resources and diversification strategy explain the performance consequences of internationalization?

2014 ◽  
Vol 52 (5) ◽  
pp. 897-915 ◽  
Author(s):  
Yan Chen ◽  
Yiwei Jiang ◽  
Chengqi Wang ◽  
Wen Chung Hsu
Keyword(s):  
Emerging Market ◽  
Product Diversification ◽  
Firm Resources ◽  
Diversification Strategy ◽  
Data Set ◽  
Content Type ◽  
Listed Firms ◽  
Performance Consequences ◽  
Performance Effects ◽  
And Performance

Purpose – The purpose of this paper is to examine how firm resources and diversification strategy explain the performance consequences of internationalization of emerging market enterprises. Design/methodology/approach – The paper conducts a regression analysis by using a novel panel data set comprising of 685 listed Chinese firms over the period of 2008-2011. Findings – The results show that the relationship between internationalization and performance is inverse U-shaped. Further, marketing resources play a greater role in enhancing the performance effects of internationalization than technological resources do. Related product diversification enhances the performance effects, while unrelated product diversification does the contrary. Research limitations/implications – The study focusses on listed firms in one country, and as a result, the findings cannot be generalized to non-listed firms and firms in other countries. Practical implications – This paper offers guidelines for international managers to improve performance of internationalization by developing a particular type of resources and diversification strategy. Originality/value – This paper extends the literature on the functional form of the internationalization-performance relationship, and further suggests that the analysis of the performance consequences of internationalization should go beyond the nexus between internationalization and performance, and focusses on firm-specific resources and strategies that may facilitate or constrain the performance effects of internationalization.

“Knowledge management practices” as moderator in the relationship between organizational culture and performance in information technology companies in India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Timothy Shea ◽  
Syed Aktharsha Usman ◽  
Sengottuvel Arivalagan ◽  
Satyanarayana Parayitam
Keyword(s):  
Information Technology ◽  
Organizational Culture ◽  
Knowledge Management ◽  
Organizational Performance ◽  
Management Practices ◽  
Self Report ◽  
Content Type ◽  
And Performance ◽  
Information Technology Companies ◽  
The Relationship

Purpose The purpose of this study is to empirically examine knowledge management (KM) practices as a moderator in the relationship between organizational culture and performance. The effect of four types of organizational culture on organizational performance was studied. In addition to direct effects, most importantly, KM practices as a moderator in strengthening the culture-performance relationship were empirically examined. Design/methodology/approach A carefully crafted survey instrument was distributed and data was collected from 1,255 respondents from 10 information technology companies in India. After checking the psychometric properties of the instrument, this paper performs hierarchical regression to test hypotheses. Findings The results reveal that: cooperative culture, innovative culture, consistent culture and effectiveness culture were all positively and significantly related to organizational performance; KM practices were positively and significantly related to organizational performance, KM practices moderate the relationship between various dimensions of organizational culture and organizational performance. Research limitations/implications As with any survey-based research, the present study suffers from the problems associated with self-report measures. These are common method bias and social desirability bias. However, this study attempts to minimize these limitations by following appropriate statistical techniques. Practical implications This study contributes to both practicing managers and the literature on KM and organizational culture. The study suggests that managers use KM practices, which are all-pervasive and very important for improving organizational performance. The results highlight the importance of implementing KM practices in organizations. Originality/value This study provides new insights into the importance of KM practices in achieving sustained competitive advantage by achieving organizational effectiveness. To the knowledge, the importance of KM practices is underemphasized in organizational culture research.

Signaling sustainability: impact that learning how to report has on enrollment, endowment and emissions of North American higher education institutions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marcel C. Minutolo ◽  
Albena Ivanova ◽  
Michelle Cong
Keyword(s):  
Higher Education ◽  
Linear Models ◽  
Higher Education Institutions ◽  
Main Hypothesis ◽  
Signaling Mechanism ◽  
Content Type ◽  
Improved Performance ◽  
And Performance ◽  
Reporting Mechanism ◽  
The Relationship

Purpose The purpose of this paper is to develop an integrated model assessing the frequency and timing between reports on the Association for the Advancement of Sustainability in Higher Education (AASHE) Sustainability Tracking, Assessment and Rating System (STARS) reporting the framework by higher education institutions (HEIs) and the relationship between the STARS score and reputation (enrollment), finances (endowment) and performance (emissions). Design/methodology/approach The development of the theoretical model is based on learning, signaling and legitimacy theories. This study collects data from the AASHE STARS to indicate the rating level of 202 HEIs, control variables, enrollment, endowments and emissions. The hypotheses were tested using generalized linear models. Findings Findings suggest that as HEIs report on their sustainability activity, they learn to report better but that there is also an “un-learning” aspect if the HEI skips reporting in a period. The results support the main hypothesis that there is a relationship between reporting and engagement with the HEIs in the form of enrollment and endowments. Finally, the findings provide evidence that the HEIs’ reporting is associated with a reduction in emissions. Practical implications The findings suggest that HEIs should develop a reporting strategy on a standardized framework such as AASHE STARs and they ought to codify the approach to learn from prior reporting. Students and alumni are increasingly seeking to engage the HEI in the sustainability process and the report is a mechanism for signaling activities. Social implications The findings suggest that AASHE STARS scores may be used by HEIs as a signaling mechanism to stakeholders of their commitment to sustainability. The signal is a mechanism to reduce information asymmetry between the HEI and stakeholders who may want more information on the institution’s attempts toward sustainability but lack access to information. Further, HEI partners have a mechanism to assess the overall level of commitment of the HEI toward sustainability and can, therefore, engage accordingly. Originality/value There has been significant work on signaling theory and sustainability. However, the relationship between STARs reporting as a signal that legitimates the HEI, learning how to report well and HEI performance has received less attention. The current study demonstrates that the STARS framework as a reporting mechanism signals the HEIs’ level of commitment to sustainability thereby legitimating it resulting in improved performance.

Financing Decisions and Performance of Italian SMEs in the Hotel Industry

2018 ◽  
Vol 60 (4) ◽  
pp. 335-354 ◽  
Author(s):  
Marco Botta
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Optimal Level ◽  
Pecking Order ◽  
Optimal Capital Structure ◽  
Financing Decisions ◽  
Medium Enterprise ◽  
Optimal Capital ◽  
And Performance ◽  
The Relationship

This study investigates the existence of an optimal capital structure for small and medium enterprise (SME) hotels through the analysis of the relationship between financing decisions and financial performance in a large sample of Italian hotel SMEs. The results show that hotel SMEs face an optimal capital structure that allows them to maximize returns to investors, while instead having both too little and too much debt reduces their financial performance. This notwithstanding, we show that hotel SMEs are not particularly concerned with optimizing their capital structure, and their funding behavior is deeply connected with the availability of internally available funds, a typical pecking order behavior, and they result extremely slow in converging toward their optimal level of leverage so that they could improve their performance by adopting a more sophisticated financial strategy.

Towards a framework for measuring creative economy: evidence from Balkan countries

2019 ◽  
Vol 23 (1) ◽  
pp. 41-62 ◽  
Author(s):  
Valentina Ndou ◽  
Giovanni Schiuma ◽  
Giuseppina Passiante
Keyword(s):  
Business Environment ◽  
Creative Economy ◽  
Data Set ◽  
Content Type ◽  
Balkan Countries ◽  
World Economic ◽  
And Performance ◽  
Diverse Data ◽  
The Relationship ◽  
Performance Dimension

PurposeThe creative process through which the territorial resources, knowledge and culture are used, exploited and configured to match needs and to achieve congruence with the changing business environment has become a crucial process for competitiveness. This is even more relevant for economies of developing countries which are continuously struggling to reap the benefits of globalisation, as well as to grasp the new opportunities for competitiveness. As such, this paper aims to try to concentrate on the dynamic perspectives of the creative economy of countries by distinguishing between the potentialities and performance. The paper tackles the influence that creativity capacities might have on performance of countries.Design/methodology/approachThe methodology consists in identifying creative economy indicators from a diverse data set of the World Economic Forum and distinguish them between potential and performance indicators.FindingsData reveal as good progress and emphasis is being devoted to increasing the level of creativity; however, the Balkan countries still holdup in their capacity to boost innovation.Practical implicationsThe paper provide a new focus of research on creativity measurement that is significant for understanding what creative capacities territories possess and the ability to make proficient use for growth and innovation.Originality/valueThis paper proposes a new operational framework for measuring and interpreting the creative economy indicators by identifying not only indicators that gauge the potentialities of a country, but also indicators that are linked with the performance dimension, as well as the relationship amongst them.

scholarly journals Cross-country differences in innovative entrepreneurial activity

2018 ◽  
Vol 58 (7) ◽  
pp. 1301-1329
Author(s):  
Ali Raza ◽  
Moreno Muffatto ◽  
Saadat Saeed
Keyword(s):  
Intellectual Property ◽  
Property Right ◽  
Intellectual Property Right ◽  
Entrepreneurial Activity ◽  
Content Type ◽  
Performance Orientation ◽  
Entrepreneurial Cognition ◽  
And Performance ◽  
The Relationship ◽  
Business Freedom

Purpose The purpose of this paper is to clarify the relationship between entrepreneurial cognition and innovative entrepreneurial activity (IEA) across countries using an institutional perspective. Design/methodology/approach The paper tests theoretical model using data collected by the Global Entrepreneurship Monitor, the Global Leadership and Organizational Behavior Effectiveness study and the Index of Economic Freedom (IEF). A multi-level analysis is performed based on set of 1,004,620 observations from 49 countries spanning 13 years (2001–2013). Findings The results suggest that in terms of formal regulations; the relationship between entrepreneurial cognitions and IEA becomes stronger when there is an increase in intellectual property right and business freedom regulations in a country. On the other hand, in terms of informal institutions the relationship between entrepreneurial cognitions and IEA becomes stronger when the level of institutional collectivism and uncertainty decreases and performance orientation increases. Originality/value The study indicates that entrepreneurship by innovation increases when the individuals possess high level of entrepreneurial cognition under suitable institutional conditions (e.g. intellectual property right, business freedom, institutional collectivism, uncertainty avoidance and performance orientation).

scholarly journals Corporate reputation

2018 ◽  
Vol 25 (1) ◽  
pp. 47-64 ◽  
Author(s):  
Vanessa Pires ◽  
Guilherme Trez
Keyword(s):  
Organizational Performance ◽  
Corporate Reputation ◽  
Research Field ◽  
Social Implication ◽  
Public Companies ◽  
Content Type ◽  
Theoretical Paper ◽  
The Difference ◽  
And Performance ◽  
The Relationship

Purpose The purpose of this paper is to discuss the different approaches to the corporate reputation construct, in order to identify a comprehensive definition that can be used for measurement purposes, gaps identified by previous literature identified. Design/methodology/approach This is a theoretical essay. The authors analyzed studies that involve the relationship between corporate reputation and organizational performance, and the attributes of national and international corporate reputation ratings. Findings The authors identified a more comprehensive definition for the reputation construct, and indicated courses for the construct’s measurement, by considering: the judgment by the stakeholders (internal, suppliers, clients and the financial market); periodical evaluations under different organizational perspectives; attention to theoretical assumptions, among other aspects. Research limitations/implications The study is a theoretical paper that presents that the research field has many definitions that cannot be used interchangeably. It indicated how the reputation construct should be operationalized for measurement purposes. This study presented a reflection on the relationship between corporate reputation and performance, showing that it is not a settled topic in the academy. Practical implications The study advances the understanding of the reputation construct measurement, considering the adopted definition and the discussion of the attributes of the main ratings on corporate reputation. The adoption of a measurement method that takes into account the definition used in this study and the features of the methodologies discussed will improve the corporate reputation assessment. Social implications Literature indicates that a good corporate reputation can affect organizational performance and the inverse relationship is also true. As a social implication, it is extremely relevant to improve the understanding the definition and measurement methods of this construct. Originality/value This study discusses one of the most important intangible resources for organizations, contributing to the understanding of the difference between the market value and the book value of public companies. Besides it should be considered that there is one lack of a definition directly related to the measurement of the reputation construct in the literature, a gap in which this study contributes.

Sign in / Sign up

Export Citation Format

Share Document