scholarly journals The role of intangible assets and liabilities in firm performance: empirical evidence

2018 ◽  
Vol 19 (1) ◽  
pp. 42-59 ◽  
Author(s):  
Abdifatah Ahmed Haji ◽  
Nazli Anum Mohd Ghazali
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Intangible Assets ◽  
Policy Implications ◽  
Corporate Financial Performance ◽  
Control Group ◽  
Single Measure ◽  
Content Type ◽  
Research Findings

Purpose The purpose of this paper is primarily to explore the extent of intangible assets and liabilities of large Malaysian companies. The authors also examine whether intangible assets and liabilities of a firm have similar or contrasting roles in firm performance. Design/methodology/approach Using a direct and straightforward measure of intangible assets and liabilities, the authors examine a large pool of data from large Malaysian companies over a six-year period spanning from 2008 to 2013. Findings The longitudinal analyses show a significant number of the sample companies, between 34 and 59.33 percent, have a consistent pattern of intangible liabilities. The authors also find firms with intangible liabilities have significantly underperformed financially than a control group of firms. In addition, the authors find that intangible liabilities have significant negative impact on firm performance whereas intangible assets have a contrasting positive impact on firm performance. Research limitations/implications One limitation of this study is that the authors have only used a single measure of intangible assets and liabilities. Albeit the measures used are straightforward and more objective, there could be other measures to capture intangibles. Practical implications The research findings have several theoretical as well as policy implications. Theoretically, the authors extend the resource-based view to the intangible asset-liability mix, affirming the crucial role of intangible resources in financial performance whilst introducing the unfavorable role of intangible liabilities in corporate financial performance. In terms of policy implications, the research findings provide initial empirical input to emerging calls for broader perspectives of intangibles, beyond intangible assets to include intangible liabilities, and therefore belong to an emerging paradigm toward the nature of intangibles. Originality/value This study documents a rare empirical account of the contrasting roles of intangible assets and liabilities in corporate financial performance.

Business sustainability performance and corporate financial performance: the mediating role of optimal investment

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ehsan Poursoleyman ◽  
Gholamreza Mansourfar ◽  
Saeid Homayoun ◽  
Zabihollah Rezaee
Keyword(s):  
Financial Performance ◽  
Generalized Method Of Moments ◽  
Corporate Financial Performance ◽  
Investment Efficiency ◽  
Content Type ◽  
Business Sustainability ◽  
Large Sample ◽  
Sustainability Performance ◽  
Mediating Role

PurposeEmploying a large sample consisting of 3,701 corporations domiciled in developed and emerging countries, this paper aims to analyze the mediating role of investment efficiency in the association between business sustainability performance and corporate financial performance.Design/methodology/approachFour different aspects of corporate sustainability offered by the ASSET4 database are used as proxies for business sustainability performance, including economic, corporate governance, social and environmental dimensions. In addition to these aspects, the aggregate measure of business sustainability performance is also employed. In order to test the association between business sustainability and corporate performance via investment efficiency, ordinary least squares, fixed-effect, random-effect and generalized method of moments statistical models were employed.FindingsThe results suggest that business sustainability performance is positively associated with corporate financial performance, indicating that sustainable corporations enjoy higher financial performance. Moreover, Sobel, Aroian and Goodman tests confirm that investment efficiency mediates the positive relationship between business sustainability performance and financial performance. Finally, further analyses show that the positive association between sustainability performance and investment efficiency is stronger for those firms headquartered in developed countries than in those located in emerging nations.Originality/valueThis paper contributes to the literature by investigating how growth opportunities advance the influence of business sustainability to corporate financial performance using a large sample from 43 countries.

Corporate social responsibility, innovation capability and firm performance: evidence from SME

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dawit Bahta ◽  
Jiang Yun ◽  
Md Rashidul Islam ◽  
Muhammad Ashfaq
Keyword(s):  
Corporate Social Responsibility ◽  
Firm Performance ◽  
Social Responsibility ◽  
Financial Performance ◽  
Developing Country ◽  
Equation Modeling ◽  
Innovation Capability ◽  
Content Type ◽  
Corporate Social

Purpose The purpose of this paper is to examine corporate social responsibility (CSR) and its effect on small and medium enterprises’ (SMEs) innovation capability and financial performance from the perspective of a developing country. It also aims to explore the role of innovation capability as a mediating factor in the linkage between CSR and SMEs’ financial performance. Design/methodology/approach A questionnaire was distributed among managers/owners of the sampled companies. Using a data set of 402 Eritrean firms and partial least squares structural equation modeling, direct and mediating effects were tested. Findings The result reveals that CSR has a positive and significant effect on the financial performance and innovation capability of SEMs. Besides, innovation capability has a positive and significant effect on the business performance of SMEs. The result also supports a partial mediation effect of innovation capability on the association between CSR and firm performance. Practical implications The findings from this research could enhance the awareness of the entrepreneurs, researchers and policymakers on CSR-SMEs’ relationship and help understand the importance of CSR as a crucial driver mechanism for companies to become more innovative and competitive. Originality/value By empirically examining the relationship between CSR, innovation capability and performance in SMEs, this study contributes to the ongoing scholarly discussion on the linkage between CSR and financial performance. Also, to the best of the authors’ knowledge, no other study investigated the mediating role of innovation capability on the link between CSR activities and firms’ financial performance in SMEs from a developing country perspective, making substantial contributions to research in terms of theory, practice and policy.

scholarly journals The performance of export manufacturing firms: roles of international entrepreneurial capability and international opportunity recognition

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md Imtiaz Mostafiz ◽  
Murali Sambasivan ◽  
See Kwong Goh
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Structural Equation ◽  
Manufacturing Firms ◽  
Opportunity Recognition ◽  
Entrepreneurial Firms ◽  
Marketing Capability ◽  
Content Type ◽  
Export Manufacturing

PurposeThe international entrepreneurial capability has achieved its legitimacy in international business literature. Leveraging capabilities to recognise opportunities is considered a pivotal strategy to achieve success. Drawing on the entrepreneurship literature and opportunity perspective, this study aims to investigate the role of international entrepreneurial capability in enhancing the international opportunity recognition (IOR) process and the performance of export manufacturing firms.Design/methodology/approachStructural equation modelling has been used to test the hypothesised relationship on 388 export manufacturing entrepreneurial firms operating in the apparel industry of Bangladesh.FindingsThe results signify that three international entrepreneurial capabilities, namely, international networking, learning and marketing capability, positively enhance the IOR process of export manufacturing firms. The IOR process positively mediates the relationships between these international entrepreneurial capabilities and firm performance.Originality/valueMerely having the international entrepreneurial capability is not sufficient to escalate the firm performance. It must be amplified by various strategic actions such as the IOR process. Entrepreneurs need to capitalise on the international entrepreneurial capability to leverage the IOR process and generate non-financial performance success. Entrepreneurial firms that focus more on stimulating non-financial performance can secure better financial performance.

The financial leverage–financial performance relationship in the emerging market of Turkey: the role of financial distress risk and currency crisis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ismail Kalash
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Financial Distress ◽  
Emerging Market ◽  
Currency Crisis ◽  
Ordinary Least Squares ◽  
Financial Leverage ◽  
Content Type ◽  
Distress Risk

PurposeThe purpose of this article is to examine how financial distress risk and currency crisis affect the relationship between financial leverage and financial performance.Design/methodology/approachThis study uses data of 200 firms listed on Istanbul Stock Exchange during the period from 2009 to 2019, resulting in 1950 firm-year observations. Pooled ordinary least squares, random effects, firm fixed effects and two-step system GMM models are used to investigate the hypotheses of this study.FindingsThe results reveal that financial leverage has negative and significant effect on financial performance, and that this effect is stronger for firms with higher financial distress risk. Furthermore, the findings provide moderate evidence that currency crisis exacerbates the negative association between leverage and performance.Practical implicationsThe results of this study have important implications for firms in emerging markets. Managers can enhance firm performance by reducing the level of financial leverage, especially in firms with higher financial distress risk. These firms incur higher debt costs, and then they can benefit more from the decreases in debt ratio in their capital structure. Moreover, the decreases in debt level have more importance in currency crisis times, when the access to external finance becomes more expensive and more difficult.Originality/valueTo the author's knowledge, this research is the first to examine the effect of currency crisis on the financial leverage–financial performance relationship and is one of few that investigate the role of financial distress risk in determining the linkage between leverage and firm performance.

Knowledge sharing, intellectual capital and firm performance

2014 ◽  
Vol 52 (2) ◽  
pp. 230-258 ◽  
Author(s):  
Zhining Wang ◽  
Nianxin Wang ◽  
Huigang Liang
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Operational Performance ◽  
Relational Capital ◽  
Research Model ◽  
Content Type ◽  
Technology Firms ◽  
High Technology Firms

Purpose – The aim of this paper is to investigate the impact of knowledge sharing (KS) on firm performance and the mediating role of intellectual capital (IC). Design/methodology/approach – A research model was developed based on prior KS and IC studies. A survey was administered to a sample of high technology firms in China and 228 usable responses were collected. Structural equation modeling (SEM) was employed to test the research model. Findings – Tacit KS significantly was found to contribute to all three components of IC, namely human, structural and relational capital, while explicit KS only has a significant influence on human and structural capital. Human, structural and relational capital, enhance both operational and financial performance of firms. The effect of KS on firm performance is mediated by IC. Explicit KS has a greater effect on financial performance than operational performance, whereas tacit KS has a greater impact on operational performance than financial performance. Research limitations/implications – The sample of high technology firms in China might limit the generalization of the findings. Nonetheless, this study takes its lead from and extends prior research, thus providing a deepened understanding of the role of KS in organizational settings. Practical implications – The paper suggests that managers can enhance firm performance by enhancing their KS and IC. Managers can develop corresponding strategies based on the findings to achieve their specific performance goals. Originality/value – This is one of the first papers to examine how KS contributes to firm performance through the mediation of IC. It will add significant value for organizations trying to enhance their performance though KS practices.

Capital structure, competitive intensity and firm performance: an analysis of Indian pharmaceutical companies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Neeti Mathur ◽  
Satish Chandra Tiwari ◽  
T. Sita Ramaiah ◽  
Himanshu Mathur
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Financial Performance ◽  
Market Competition ◽  
Competitive Intensity ◽  
Content Type ◽  
Relationship Of ◽  
The Relationship ◽  
Moderating Role

PurposeThis research paper aims to explore the relationship of financial performance and capital structure of Indian pharma firms of BSE 500, the impact of research and development (R&D) expenditure on financial performance and also explore the moderating role of competitive intensity between the existing relationship of capital structure and firm performance.Design/methodology/approachThe balanced panel data of listed pharma firms of BSE 500 are used for the research study, and the present study adopts both the panel and ordinary least square (OLS) estimation techniques to draw the results.FindingsThe results exhibit that the high debt ratio is harmful for the accounting performance of the selected sample of pharma firms of BSE 500. Besides, market competition negatively moderates the relationship between capital structure and firm performance.Research limitations/implicationsThe research findings provide evidence for the policymakers/regulators that the sample firms should discourage the high debt financing in the presence of competitive intensity in the product marketplace.Originality/valueThe core contribution of the current research is to examine impact of R&D expenditure on financial performance and the moderating role of market competition on the relationship of capital structure and firm performance to the best of the authors' knowledge, and no single study has previously explored this relationship in the context of BSE 500 pharma firms.

Does structural capital count in human capital-corporate financial performance relationship? Evidence from deposit money banks in Nigeria

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nnachi Egwu Onuoha
Keyword(s):  
Human Capital ◽  
Financial Performance ◽  
Annual Reports ◽  
Corporate Financial Performance ◽  
Significant Positive Effect ◽  
Content Type ◽  
Mediating Role ◽  
Structural Capital ◽  
Positive Effect

Purpose The purpose of this paper is to explore human capital and corporate financial performance link from the perspective of human capital theory, resources-based view and balanced score card approach, and the mediating role of structural capital in this relationship. Design/methodology/approach Overall, a data set was drawn from five-year annual reports of deposit money banks (DMBs) in Nigeria. Additionally, the bootstrap procedure was performed to test the mediating role of structural capital. Findings Specifically, the paper results indicate that whereas human capital has significant positive effect on corporate financial performance and structural capital, structural capital has significant positive effect on corporate financial performance. Additionally, the study finds structural capital to mediate the effect of human capital on organizational financial performance. Research limitations/implications This paper focused on 12 DMBs in Nigeria and their five year annual reports. Accordingly, future studies in this area should increase the number of banks and years, and include firms operating in insurance, manufacturing, telecommunication and oil and gas industries to permit comparability of results and broader basis for generalizability. Moreover, the study results provide insights that would serve as robust empirical basis for policy makers to insist on enhancement of the value of human and structural capital variables. Practical implications The managers of DMBs should commit to development of their employees through improvement in their training and health programs, among others. Also, they should ensure continuous improvement of their structural capital to enable the investments in their employee to translate to enhanced corporate financial performance. Originality/value To the best of the author’s knowledge, this is the first study to explore the mediation effect of structural capital on the human capital-corporate financial performance link using evidence from DMBs in Nigeria and, thus, extends and deepens extant literature on human capital-organizational performance nexus.

Mediating role of immediate performance outcomes between supply chain integration and firm performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nikhat Afshan ◽  
Purnendu Mandal ◽  
Angappa Gunasekaran ◽  
Jaideep Motwani
Keyword(s):  
Supply Chain ◽  
Firm Performance ◽  
Financial Performance ◽  
Performance Outcomes ◽  
Supply Chain Integration ◽  
Equation Modeling ◽  
Content Type ◽  
Mediating Role ◽  
The Relationship

PurposeThe purpose of this paper is to examine the mediating role of immediate performance outcomes on the relationship between dimensions of supply chain integration (SCI) and financial performance.Design/methodology/approachThis study tests the proposed model linking dimensions of SCI, immediate performance outcomes and financial performance using structural equation modeling on a sample of Indian manufacturing companies.FindingsThe findings suggest that the relationship between dimensions of SCI and firm performance is fully mediated through the immediate performance outcomes.Originality/valueThis study deals with the potential benefits of SCI, especially in developing countries like India, where a little research has been done in this area. Also, this study provides support to practitioners that SCI is an effective way of improving both supply chain performance and financial performance.

Environmental commitment and firm financial performance: a moderated mediation study of environmental collaboration with suppliers and CEO gender

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Thinh Truong Vu ◽  
Wilson V.T. Dang
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Structural Equation ◽  
Equation Modeling ◽  
Content Type ◽  
Environmental Commitment ◽  
Firm Financial Performance ◽  
The Relationship ◽  
Ceo Gender

Purpose Prior studies have found a mixed result on the relationship between environmental commitment and firm performance. To shed a new light on this relationship, this study aims to draw on stakeholder theory, upper echelon theory and gender socialization theory to determine the mediating role of environmental collaboration with suppliers and the moderating role of chief executive officers (CEOs) gender into this relationship. Design/methodology/approach This study conducts a questionnaire survey to collect sample data of 177 CEOs in manufacturing firms in China. Structural equation modeling is used to analyze data and test hypotheses. Findings Empirical results show that environmental commitment has a positive influence on firm financial performance. Furthermore, the results show that environmental collaboration with suppliers mediates the link between environmental commitment and financial performance. In addition, CEO gender has a moderating effect on the relationship between environmental commitment and environmental collaboration with suppliers. Finally, CEO gender also moderates the indirect effect of environmental commitment on financial performance through environmental collaboration with suppliers. Originality/value Findings of this study helps to clarify the mediating and moderating mechanism in the relationship between environmental commitment and firm performance. That is this study helps to clarify the mixed relationship between environmental commitment and firm performance in prior literature. This study also provides new insight and knowledge for business managers to make better decision in dealing with the environmental issue to enhance firm performance.

Effects of quality management on hospitality performance in different contexts

2016 ◽  
Vol 116 (5) ◽  
pp. 1005-1023 ◽  
Author(s):  
Josep Llach ◽  
Maria Del Mar Alonso-Almeida ◽  
Jordi Martí ◽  
Alfredo Rocafort
Keyword(s):  
Firm Performance ◽  
Quality Management ◽  
Service Quality ◽  
Financial Performance ◽  
Management Team ◽  
Equation Modeling ◽  
Content Type ◽  
Management Standard ◽  
The Impact

Purpose – The purpose of this paper is threefold: first, to test the role of the managerial team’s commitment to quality deployment, quality performance and firm performance; second, to shed light on the effects of a certified quality management system on this chain; and third, to analyze the effects of changes in this chain on different management team attitudes, namely, innovativeness. Design/methodology/approach – Based on a survey conducted in a sample of 370 hotels from the region of Madrid (Spain), the model and hypotheses were validated using structural equation modeling analysis. Findings – The results reveal the importance of a commitment to quality for quality deployment. In addition, quality deployment has a strong impact on operations and employee and customer performance. However, only impacts derived from customers’ perceptions of service quality affect firm performance. In addition, a contextual analysis was performed to verify whether various contextual factors (certification in a quality management standard and the innovative attitude of the management team) could modify the previously obtained results for the full sample. Practical implications – The management team should understand that its attitude toward quality management could affect the company’s overall performance. On the one hand, the team should be aware that the cost of implementing quality practices could be a burden for employees in the performance of their daily activities. On the other hand, there is a positive relationship between involvement in addressing customers’ requirements and financial performance. Therefore, a balance between the efforts to maintain a certain level of quality by the firm’s employees and the service quality offered to the customers is crucial to achieving better financial performance. Originality/value – The impact of the implementation of quality management practices on performance has been widely studied; however, the role of intangible factors has not been commonly discussed in service industries in general and even less so in the hospitality sector. This paper analyses the influence of the quality management team’s attitudes toward innovativeness and the implementation of a quality management standard.

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