CEO inside debt and the value of excess cash

2018 ◽  
Vol 19 (2) ◽  
pp. 225-244 ◽  
Author(s):  
Mohamed Belkhir ◽  
Sabri Boubaker ◽  
Kaouther Chebbi
Keyword(s):  
Firm Value ◽  
Cash Holdings ◽  
Future Research ◽  
Content Type ◽  
Marginal Value ◽  
Inside Debt ◽  
Excess Cash ◽  
Fama And French ◽  
The Relationship ◽  
Practical Implications

PurposeThe purpose of this paper is to investigate the relationship between corporate debt-like compensation and the value of excess cash holdings.Design/methodology/approachThe sample comprises 876 US firms covered by ExecuComp over the period 2006-2013. The authors apply the valuation regression of Fama and French (1998) to examine the marginal value of excess cash as a function of CEO inside debt holdings.FindingsThis paper proposes one hypothesis. The results constitute evidence that the value of excess cash to shareholders declines as CEO inside debt increases. More interestingly, excess cash holdings contribute less to firm value when shareholders expect their value to be destroyed due to managers’ conservative behavior.Research limitations/implicationsThe sample comprises only US firms, owing to a lack of firms data from other countries. It would be interesting to conduct future research on an international sample.Practical implicationsThis paper contributes to a deeper understanding of investor valuation of excess cash in the presence of CEO inside debt. The findings complement previous studies on US firms by confirming the existence of a relationship between the agency costs of debt and firm policy decisions.Originality/valueThis work is, to the best of the authors’ knowledge, the first to examine the relationship between debt-like compensation and excess cash valuation, and it supports the view that the conflict between shareholders and debtholders largely affects firm cash policy, and hence, cash valuation.

Toward better theory on the relationship between commitment, participation and leadership in unions

2012 ◽  
Vol 33 (8) ◽  
pp. 715-731 ◽  
Author(s):  
Gregor Gall ◽  
Jack Fiorito
Keyword(s):  
Design Methodology ◽  
Academic Research ◽  
Critical Assessment ◽  
Future Research ◽  
Research Needs ◽  
Union Commitment ◽  
Content Type ◽  
Extant Literature ◽  
The Relationship ◽  
Practical Implications

PurposeThe aim of this paper is to give a critique of the extant literature on union commitment and participation in order to develop remedies to identified weaknessesDesign/methodology/approachThe paper uses a critical assessment of extant literature.FindingsA number of critical deficiencies exist in the literature to which remedies are proposed.Research limitations/implicationsThe remedies need testing through empirical research.Practical implicationsFuture research needs to have different research foci and questions.Social implicationsWith a reorientation of future research on union commitment, participation and leadership, unions may be better able to benefit from academic research in the area.Originality/valueThe paper suggests that a reorientation of future research on union commitment, participation and leadership will allow more incisive and more robust contributions to be made to understanding unions as complex social organisms.

The effect of talent management and human capital on sustainable business performance: an empirical investigation in Malaysian hospitals

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nagwan Abdulwahab AlQershi ◽  
Ramayah Thurasamy ◽  
Gamal Abdualmajed Ali ◽  
Hussein Abu Al-Rejal ◽  
Amr Al-Ganad ◽  
...  
Keyword(s):  
Human Capital ◽  
Structural Equation ◽  
Business Performance ◽  
Talent Management ◽  
Mediating Effect ◽  
Future Research ◽  
Sustainable Business ◽  
Content Type ◽  
The Relationship ◽  
Practical Implications

Purpose This paper aims to examine the mediating role of human capital on the talent management in hospitals’ sustainable business performance in the health-care sector of Malaysia. Design/methodology/approach The study used a quantitative approach, with an initial sample of 174 Malaysian hospitals. The theoretical framework was based on previous studies of talent management (TM), human capital (HC) and sustainable business performance (SBP). Partial least squares-structural equation modelling (PLS-SEM) was used to test the study’s hypotheses. Findings Talent management mindset (TMM), but not talent management strategy (TMS), has a significant relationship with HC and SBP. HC has a significant direct relationship with SBP, and also mediates the relationship between TMM and SBP but not between TMS and SBP. Research limitations/implications This work is one of a limited number of studies to empirically address TM, HC and SBP in this context. The study is limited to Malaysian hospitals. It provides theoretical contributions by broadening the knowledge of HC, TM and the multifocal perspective of hospitals’ SBP, a relevant but underexplored issue, offering several avenues for future research. Practical implications The findings have beneficial practical implications for both policy makers and managers. First, focusing on talented people will directly improve sustainable performance in the Malaysian health sector. The findings also have important theoretical implications both for Malaysia and countries in similar situations. The study will serve as a reference point for such countries in trying to understand factors influencing SBP. Originality/value This is the first study to examine the mediating effect of HC on the relationship between talent management and hospitals’ sustainable business performance in Malaysia, or worldwide.

scholarly journals The impact of related party transactions on firm value

2019 ◽  
Vol 17 (3) ◽  
pp. 571-588
Author(s):  
Ahmed A. Diab ◽  
Ahmed Aboud ◽  
Arafat Hamdy
Keyword(s):  
Firm Value ◽  
Design Methodology ◽  
Emerging Market ◽  
Content Type ◽  
Related Party Transactions ◽  
Intermediary Role ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

Purpose The purpose of this study is to address the impact of the related party transactions (RPTs) on firm value. The authors bring evidence from a usually ignored empirical setting: an African emerging market. Design/methodology/approach In particular, the authors focus on companies listed on the Egyptian stock market using a sample of EGX 30 from 2012 to 2017. Findings Unlike the literature, the authors find no significant relationship between RPTs and market value. Practical implications This research provides insights for policymakers and other interested parties concerning the perception of RPTs in Egypt. Originality/value The reported different findings of this study assure the intermediary role of the context and the local culture in the relationship between RPTs and firm value, in contrast to the negative view that is mostly reported in the literature.

Facilitating the application of auditors’ underlying skeptical disposition

2020 ◽  
Vol 33 (1) ◽  
pp. 34-56
Author(s):  
Jahanzeb Khan ◽  
Noel Harding
Keyword(s):  
Design Methodology ◽  
Audit Quality ◽  
Future Research ◽  
Relative Importance ◽  
Content Type ◽  
Professional Skepticism ◽  
Schwartz Value Survey ◽  
Auditor Judgments ◽  
The Relationship ◽  
Practical Implications

Purpose Motivated by ongoing calls for auditors to exercise an elevated level of professional skepticism, this paper aims to examine the relationship between basic human values (values) and an underlying skeptical disposition (trait skepticism). Understanding the values that are associated with levels of trait skepticism will help in the design of audit environments that make the application of an underlying skeptical disposition more likely. Design/methodology/approach A survey was administered in which 140 postgraduate auditing students responded to the Schwartz value survey to measure the relative importance of different values, and the Hurtt trait skepticism scale to measure trait skepticism. The relative importance of the ten values was regressed against trait skepticism. Findings This study finds that the importance placed in the values of tradition and power, relative to other values, is negatively associated with levels of trait skepticism. Research limitations/implications The use of postgraduate auditing students as participants may limit the generalizability of the study’s findings. Practical implications Qualified by the need for future research to test the generalizability of the findings to an audit practitioner sample, the results of this study suggest that auditors with higher levels of trait skepticism may experience negative affect in environments that emphasize values of power and tradition. To the extent that current audit environments emphasize tradition and power, the results may help explain why trait skepticism is not consistently reflected in audit judgments and actions. Originality/value The affective implications of the environment within which auditors exercise professional skepticism is emerging as an important area by which to understand and improve audit quality. By identifying the values that those with a high skeptical disposition place relatively less importance in, this study informs an understanding of the circumstances where an underlying skeptical disposition is more or less likely to be reflected in auditor judgments and actions.

Intelligence and job satisfaction in the USA and China

2014 ◽  
Vol 9 (3) ◽  
pp. 232-244 ◽  
Author(s):  
Cassandra Thompson ◽  
Samuel Lane
Keyword(s):  
Job Satisfaction ◽  
Empirical Studies ◽  
Negative Relationship ◽  
Future Research ◽  
Turnover Rates ◽  
Content Type ◽  
The Usa ◽  
Different Cultures ◽  
The Relationship ◽  
Practical Implications

Purpose – This study aims to evaluate both intelligence and job satisfaction of workers in the USA and China. Each topic will be studied individually, first, to determine the relationship between intelligence and job satisfaction. The statistics between China and the USA will then be compared and contrasted to assess how different cultures will affect emotional intelligence and job satisfaction of those in the workforce. Design/methodology/approach – A review of the empirical studies on intelligence and job satisfaction was performed and used to develop a model to guide future research. Findings – There is a negative relationship between intelligence and job satisfaction in the USA, but no studies have been done to compare both constructs cross-culturally. Research limitations/implications – The proposed study can be used to gain an understanding of the relationship between intelligence and job satisfaction across different cultures. Practical implications – The link between job satisfaction and intelligence can be used by employers to determine information about other aspects of their business, such as turnover rates of productive employees. Originality/value – Although there has been some research on the relation between intelligence and job satisfaction, notably by Ganzach (1998), very little has been done across cultures.

scholarly journals Identity, diversity and diversity management

2016 ◽  
Vol 35 (1) ◽  
pp. 48-64 ◽  
Author(s):  
Lotte Holck ◽  
Sara Louise Muhr ◽  
Florence Villesèche
Keyword(s):  
Design Methodology ◽  
Management Practices ◽  
Diversity Management ◽  
Future Research ◽  
Policy Makers ◽  
Content Type ◽  
Hr Managers ◽  
The Relationship ◽  
Practical Implications ◽  
Diversity Research

Purpose – The purpose of this paper is to examine the relationship between the identity and diversity literatures and discuss how a better understanding of the theoretical connections between the two informs both diversity research and diversity management practices. Design/methodology/approach – Literature review followed by a discussion of the theoretical and practical consequences of connecting the identity and diversity literatures. Findings – The authors inform future research in three ways. First, by showing how definitions of identity influence diversity theorizing in specific ways. Second, the authors explore how such definitions entail distinct foci regarding how diversity should be analyzed and interventions actioned. Third, the authors discuss how theoretical coherence between definitions of identity and diversity perspectives – as well as knowledge about a perspective’s advantages and limitations – is crucial for successful diversity management research and practice. Research limitations/implications – The authors argue for a better understanding of differences, overlaps and limits of different identity perspectives, and for a stronger engagement with practice. Practical implications – The work can encourage policy makers, diversity and HR managers to question their own practices and assumptions leading to more theoretical informed diversity management practices. Originality/value – The theoretical connections between identity and diversity literature have so far not been reviewed systematically. The work foregrounds how important it is for diversity scholars to consider identity underpinnings of diversity research to help further develop the field within and beyond the three streams the authors discuss.

The effects of ethical climates on trust in supervisor and trust in organization in a Polish context

2015 ◽  
Vol 53 (1) ◽  
pp. 24-39 ◽  
Author(s):  
Aditya Simha ◽  
Agata Stachowicz-Stanusch
Keyword(s):  
Structural Equation ◽  
Ethical Climate ◽  
Equation Modeling ◽  
Future Research ◽  
Content Type ◽  
Ethical Climates ◽  
Managerial Employees ◽  
The Relationship ◽  
Practical Implications

Purpose – The purpose of this paper is to explore the effects of ethical climate types on two components of organizational trust, i.e. trust in supervisor and trust in organization. Design/methodology/approach – A sample of 178 managerial employees from seven hospitals in Poland was used to investigate the specific relationships between ethical climates (i.e. egoistic, benevolent, and principled) and trust in supervisor and trust in organization. Structural equation modeling was used to explore the relationship between ethical climates and the two trust components. Findings – It was found that egoistic climates were negatively associated with trust in organization and trust in supervisor, whereas benevolent climates were positively associated with trust in supervisor and trust in organization. No support was obtained for any sort of association between principled climates and either of the two trust components. Research limitations/implications – Future research should examine the role of trust as a mediating variable in the relationship between ethical climates and variables such as commitment or productivity or satisfaction. Future research should also examine different national and work contexts to test out these relationships. Practical implications – Managers and organizations should try and establish benevolent ethical climates as opposed to egoistic ones, in order to bolster levels of trust among their employees. Originality/value – The findings of this paper are unique and original because this is the first study to suggest a relationship between ethical climate types and the two trust components. The value of this study is that it provides managers and organizations with a way by which they could potentially increase levels of trust among their employees.

Finance, corporate value and credit market freedom in overinvesting US firms

2020 ◽  
Vol 20 (6) ◽  
pp. 1053-1072
Author(s):  
Alfonsina Iona ◽  
Marco Alberto De Benedetto ◽  
Dawit Zerihun Assefa ◽  
Michele Limosani
Keyword(s):  
Corporate Finance ◽  
Firm Value ◽  
Cash Holdings ◽  
Agency Problems ◽  
Credit Market ◽  
The State ◽  
Corporate Value ◽  
Content Type ◽  
External Finance ◽  
The Relationship

Purpose Using a sample of US firms more likely to be affected by agency problems, the purpose of this paper is to investigate the relationship between corporate value and financial policies and to study whether credit market freedom (CMF) affects this relationship. Design/methodology/approach The authors identify a sub-sample of non-financial US firms potentially affected by agency problems using a joint criterion of over-investment and high cash-holdings. A generalized method of moment econometric framework is then used to estimate the impact of cash-holdings and leverage policies on firm value for this sub-sample. This exercise is also performed by taking into account the level of CMF of the state where the firm operates. Findings The results show that the relationship between cash-holdings – or leverage – and firm value is “U-shaped.” In addition, when the authors focus on the role played by the level of CMF, the authors find a number of interesting facts: CMF facilitates the firms’ access to external finance, thereby relaxing the need of internal funds for investing; the relationship between cash-holdings and firm value is “U-shaped” only in states enjoying high levels of CMF; the probability of observing firms more likely to be affected by agency problems is higher in states with high levels of CMF. Research limitations/implications The empirical findings provide important insights to policymakers, shareholders and practitioners. To policymakers, the results suggest that providing institutional environments with greater CMF can enhance the firm access to external finance, the level of corporate investment and the economic growth. To shareholders, the findings highlight that the conflicts of interest between managers and shareholders may be more severe in states with higher CMF; therefore, adequate financing policies and corporate governance mechanisms must be used to mitigate these conflicts and maximize the firm value. Finally, to practitioners, the evidence suggests that, in valuing a firm, they must take into consideration whether the economic environment provides managers with more freedom to stockpile cash and invest sub-optimally. Originality/value The paper contributes to the corporate finance and governance literature in two respects. First, it provides new evidence on the shape of the relationship between cash holdings and firm value for firms affected by empire-building managers. Second, at the best of the knowledge, it is the first corporate finance study, which analyzes the role played by the CMF at the state level on the capital structure and the level of investment of the firms.

The influences of interdependence, opportunism and technology uncertainty on interfirm coopetition

2019 ◽  
Vol 34 (5) ◽  
pp. 948-964 ◽  
Author(s):  
Linlin Chai ◽  
Jin Li ◽  
Thomas Clauss ◽  
Chanchai Tangpong
Keyword(s):  
Longitudinal Research ◽  
Organizational Level ◽  
Future Research ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Content Type ◽  
Contextual Condition ◽  
Research Designs ◽  
The Relationship ◽  
Practical Implications

Purpose The purpose of this study is to investigate the antecedents and the conditions of coopetition at the inter-organizational level. Design/methodology/approach This study is based on survey research methodology and analyzes the data from 138 companies regarding the antecedents and the conditions of their coopetition. Findings The results indicate that the interdependence between partners (i.e. the antecedent) positively affects interfirm coopetition, and that this relationship is contingent on the joint occurrence of opportunism (a behavioral condition) and technology uncertainty (a contextual condition). Specifically, highly interdependent firms are more likely to be involved in a coopetitive relationship when both opportunism and technology uncertainty are high. Interestingly, the authors’ data also show that opportunism or technology uncertainty alone may not be adequate in moderating the interdependence–coopetition relationship. Research limitations/implications This study contributes to the current literature in two meaningful ways. First, it empirically examines interdependence as a potential antecedent of interfirm coopetition. Second, it improves our understanding of the behavioral and contextual conditions that facilitate the formation of coopetitive relationships by examining the moderating roles of opportunisms and technology uncertainty in the relationship between interdependence and interfirm coopetition. The limitations of this study lie in its confined method of cross-sectional survey from the focal firm’s perspective. Future research may advance beyond this study through experimental and/or longitudinal research designs. Practical implications This study provides managers with two important practical insights in coopetition management. First, the findings suggest a two-step approach to help a firm assess and manage the level of coopetition in its relationship with a business partner. In addition, the findings provide a counterintuitive suggestion to managers that the joint conditions of high opportunism and high technology uncertainty indeed prime the relationship for the rise of coopetition, provided that managerial efforts are made to somewhat increase the level of interdependence in the relationship. Originality/value Despite the growing number of studies on coopetition, research still lacks knowledge about the antecedents and the conditions of inter-organizational coopetition, and this study aims to fill this gap.

scholarly journals Does executive ownership lead to excess target cash? The case of UK firms

2017 ◽  
Vol 17 (5) ◽  
pp. 876-895 ◽  
Author(s):  
Alfonsina Iona ◽  
Leone Leonida ◽  
Alexia Ventouri
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Cash Holdings ◽  
Logit Analysis ◽  
Governance Mechanism ◽  
Governance System ◽  
Content Type ◽  
Excess Cash ◽  
The Uk ◽  
The Impact

Purpose The aim of this paper is to investigate the dynamics between executive ownership and excess cash policy in the UK. Design/methodology/approach The authors identify firms adopting an excess policy using a joint criterion of high cash and cash higher than the target. Logit analysis is used to estimate the impact of executive ownership and other governance characteristics on the probability of adopting an excess cash policy. Findings The results suggest that, in the UK, the impact of the executive ownership on the probability of adopting an excess cash policy is non-monotonic, in line with the alignment-entrenchment hypothesis. The results are robust to different definitions of excess cash policy, to alternative specifications of the regression model, to different estimation frameworks and to alternative proxies of ownership concentration. Research limitations/implications The authors’ approach provides a new measure of the excess target cash for the firm. They show the need to identify an excess target cash policy not only by using an empirical criterion and a theoretical target level of cash, but also by capturing persistence in deviation from the target cash level. The authors’ measure of excess target cash calls into questions findings from previous studies. The authors’ approach can be used to explore whether excess cash holdings of UK firms and the impact of managerial ownership have changed from before the crisis to after the crisis. Practical implications The authors’ measure of excess target cash allows identifying in practice levels of cash which are abnormal with respect to an equilibrium level. UK firms should be cautious in using executive ownership as a corporate governance mechanism, as this may generate suboptimal cash holdings and suboptimal firm value. Excess cash policy might be driven not only by a poor corporate governance system, but also by the interplay between agency costs of managerial opportunism and cost of the external finance which further research could explore. Originality/value Actually, “how much cash is too much” is a question that has not been addressed by the literature. The authors address this question. Also, this amount of cash allows the authors to study the extent to which executive ownership contributes to explain the out-of-equilibrium persistency in the cash level.

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