scholarly journals Ownership feature and firm performance via corporate innovation performance

2018 ◽  
Vol 25 (2) ◽  
pp. 239-250 ◽  
Author(s):  
Dung Nguyen ◽  
Hoai Nguyen ◽  
Kien S. Nguyen
Keyword(s):  
Firm Performance ◽  
Positive Impact ◽  
Policy Implications ◽  
Ownership Concentration ◽  
Likelihood Method ◽  
Sales Growth ◽  
Reverse Causality ◽  
Data Set ◽  
Content Type ◽  
Cmp Model

Purpose The purpose of this paper is to investigate the simultaneous relationship among ownership concentration, innovation and firm performance of the small- and medium-sized enterprises (SMEs) in Vietnam during the 2011–2015. By employing a Conditional Mixed Process (CMP) model, the findings show that: there is no impact of ownership concentration on innovation, but it has a positive impact on sales growth; innovation positively affects firm performance; and there exists a positively reverse causality from sales growth to innovation. Design/methodology/approach In this study, the authors propose the adaption of CMP model (Roodman, 2011). The nature of the first stage dependent variable – Innovation – is a binary one while the dependent variable Performance is continuous. Therefore, a model that can adapt the binary nature of the dependent variable and perform the estimation of a system of equations such as CMP model is preferred. The CMP framework is substantially that of seemingly unrelated regression, but with application in a larger scope. This approach is based on a “simulated maximum likelihood method” suggested by Geweke–Hajivassiliou–Keane algorithm. Findings By applying CMP method, this study examines the simultaneous relationship among ownership concentration, innovation and firm performance of the SMEs in Vietnam from 2011 to 2015. The findings indicate that: there is no impact of ownership concentration on innovation, but it has a positive impact on sales growth; innovation positively affects firm performance; and there exists a positively reverse causality from sales growth to innovation. Research limitations/implications In spite of the efforts to explore the simultaneous relationship among ownership concentration, innovation and firm performance of the SMEs in Vietnam, the study still has some limitations which are promising further research directions. First, the SME surveys by Central Institute for Economic Management do not have much information about other types of ownership including state-owned and foreign ownership. Therefore, possible further studies with richer data sets may explore the impacts of different types of ownership on firm innovation and performance. Second, other types of innovation such as organizational innovation, marketing innovation can also be investigated in further studies in a richer data set for the case of Vietnam SMEs. Originality/value The findings show that: there is no impact of ownership concentration on innovation, but it has a positive impact on sales growth; innovation positively affects firm performance; and there exists a positively reverse causality from sales growth to innovation. The policy implications insist on facilitating SMEs with easier access to capital via loans with preferred interest or trust loans without collateral, training programs for the labor force and SME leaders, and reduction of unnecessary administrative procedure.

The impact of training on firm outcomes: longitudinal evidence from Canada

2019 ◽  
Vol 41 (2) ◽  
pp. 117-131
Author(s):  
Stéphane Renaud ◽  
Lucie Morin
Keyword(s):  
Firm Performance ◽  
Positive Impact ◽  
Voluntary Turnover ◽  
Empirical Literature ◽  
Reverse Causality ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Firm Outcomes ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of three training indicators, namely offer, participation and cost, on three firm outcomes, namely voluntary turnover, firm performance and profit. Design/methodology/approach The empirical analysis is carried out using firm-level data sourced from a Canadian national data set. In total, data from 5,237 for-profits firms with ten employees or more were analyzed longitudinally over eight years. Results were generated by XTREG fixed effect longitudinal analyses between the three variables of training, voluntary turnover, firm performance and profit. Findings Training offer, operationalized as the number of different formal training programs offered annually by an employer, significantly decreases voluntary turnover while it significantly increases performance and profit. Training participation, operationalized as the percentage of employees receiving training per year, has a significant positive impact on voluntary turnover. Training cost, operationalized as the annual cost of training per employee, has no impact on the three firm outcomes. Practical implications Among the various human resource practices a firm can use to strengthen its human capital, training can have a significant impact of its own. Investing in a diversified training offer brings value to a firm by decreasing employee voluntary turnover while increasing firm performance and profit. Originality/value This research contributes to the strategic impact of organizational training, demonstrating the impact of training on key organizational outcomes over time. Further, this paper contributes to the empirical literature by making a distinction between voluntary and involuntary turnover. Last, even though this study does not entirely addresses the problem of possible reverse causality, using longitudinal objective data, this study addresses several limits of past research at the macro-level of analysis.

scholarly journals The governance role of shareholders and board of directors on firm performance: an eclectic governance-performance model

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ozgur Ozdemir ◽  
Erhan Kilincarslan
Keyword(s):  
Firm Performance ◽  
Agency Theory ◽  
Board Of Directors ◽  
Positive Impact ◽  
Ownership Concentration ◽  
Data Set ◽  
Resource Based View ◽  
Content Type ◽  
The Impact

Purpose This study aims to examine the governance role of shareholders and board of directors in determining firm performance through an eclectic multi-theoretic model that integrates structure and incentive functions of agency theory and capability aspect of the resource-based view. Design/methodology/approach The research model uses a large panel data set of 2,364 UK firms over the period 2000–2010 and uses alternative specifications of the model to improve robustness. Findings The results show that the industry experience of major shareholders as a proxy for shareholder capability has a significant positive impact on investee firm performance. The findings also reveal that the lock-in effect of the largest shareholder has a positive impact on performance, whereas the monitoring effectiveness of shareholders is not associated with ownership concentration. Moreover, the results indicate the underlying capabilities of the board of directors and their impact on corporate performance – particularly, the interlocking directorates of executives have a positive impact on firm performance but those of non-executives have a negative one. However, the previous directorship experience of non-executives has a positive impact on performance. Research limitations/implications This study presents a more comprehensive and complete understanding of the governance-performance relationship beyond the narrow or partial explanations provided by single-theory-based studies or those of investigating the effect of various governance tools separately. Practical implications This study provides more insights into the capability dimension of shareholders and the role of incentives in motivating shareholders to exercise stronger oversight on the management rather than just using ownership concentration. Hence, the study can serve as valuable guidance for investors, corporate managers and policymakers. Originality/value To the best of the knowledge, this is the first comprehensive study that uses an eclectic philosophical approach, integrating the agency theory and resource-based view, to not only examine the impact of board of directors but also investigate the governance role of shareholders in modern corporations to understand how shareholders acquire the requisite skills and information, the best practices and processes, and ultimately use the scarce and inimitable resources that help investee firms in improving their performance.

The role of institutions in output growth volatility-financial development nexus

2016 ◽  
Vol 43 (6) ◽  
pp. 910-927 ◽  
Author(s):  
Ibrahim Dolapo Raheem ◽  
Kazeem Bello Ajide ◽  
Oluwatosin Adeniyi
Keyword(s):  
Financial Development ◽  
Measurement Errors ◽  
Output Growth ◽  
Policy Implications ◽  
Output Volatility ◽  
Reverse Causality ◽  
Data Set ◽  
Content Type ◽  
Growth Volatility

Purpose The purpose of this paper is to investigate the role of institutions in the financial development-output growth volatility nexus. It provides new channels through which financial development can dampen the output growth volatilities of the countries under investigation. Design/methodology/approach A comprehensive data set for 71 countries covering the period from 1996 to 2012 and the System GMM approach were used. The choice of the methodology is to deal with endogeneity issues such as measurement errors, reverse causality among other issues. Findings A number of findings were emanated from the empirical analysis. First, the estimates provided evidence of the volatility-reducing effect of financial development. Second, institutions do not have the same reducing influence on output growth volatility. Third, the interaction of financial development and institutions showed that the output volatility reduction arising from financial development is enhanced in the presence of improved institutions. Research limitations/implications The policy implications derived from this study are in twofolds: first, it is important for policymakers to formulate policies that would ensure and enhance the development of the financial sectors, since its importance in minimizing output volatility has been established. Second, institutional quality should be developed so as to further enhance the growth volatility-reducing influence of financial development. Particularly, institutions should be improved along the multiple dimensions captured in the analysis. Originality/value To the best knowledge, the novelty of this study to the literature is the introduction of institutions, which is hypothesized to increase the dampening effects of financial development in output growth volatility.

Effect of ownership structure and board structure on firm value: evidence from India

2017 ◽  
Vol 17 (4) ◽  
pp. 700-726 ◽  
Author(s):  
Rakesh Mishra ◽  
Sheeba Kapil
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Performance Measures ◽  
Board Structure ◽  
Tobin’S Q ◽  
Reverse Causality ◽  
Tobin's Q ◽  
Data Set ◽  
Content Type ◽  
The Relationship

Purpose This paper aims to explore the relationship of promoter ownership and board structure with firm performance for Indian companies. Design/methodology/approach Corporate governance structures of 391 Indian companies out of CRISIL NSE Index (CNX) 500 companies listed on national stock exchange (NSE) have been studied for their impact on performance of companies. Panel data regression methodology has been used on data for five financial years from 2010 to 2014 for the selected companies. Performance measures considered are market-based measure (Tobin’s Q) and accounting-based measure (return on assets [ROA]). Findings The empirical findings indicate that market-based measure (Tobin’s Q) is more impacted by corporate governance than accounting-based measure. There is significant positive association between promoter ownership and firm performance. It is also indicated that the relationship between promoter ownership and firm performance is different at different levels of promoter ownership. Board size is found to be positively related to ROA; however, board independence is not found to be related to any of the performance measures. Research limitations/implications Limitations of the study are in terms of data methodology and possible omission of some variables. It is felt that endogeneity and reverse causality might be better addressed using simultaneous equation methodology. Originality/value The paper adds to the emerging body of literature on corporate governance performance relationship in Indian context using a reasonably wider and newer data set.

Corporate social responsibility and financial performance nexus

2018 ◽  
Vol 9 (3) ◽  
pp. 301-328 ◽  
Author(s):  
Joseph Dery Nyeadi ◽  
Muazu Ibrahim ◽  
Yakubu Awudu Sare
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Positive Impact ◽  
Public Investment ◽  
Data Set ◽  
Content Type ◽  
The Public ◽  
Firm Financial Performance ◽  
Corporate Social ◽  
The Impact

Purpose The paper aims to investigate empirically the impact of corporate social responsibility (CSR) on financial performance in South African listed firms. Design/methodology/approach The paper uses panel corrected standard errors to estimate the effect of CSR on firm financial performance and thus addresses contemporaneous cross-correlations across the panel cross sections. The study uses a broad base measure of CSR created by the Public Investment Corporation data set and the combination of accounting and economic means of measuring firm financial performance. Findings CSR is found to have a strong positive impact on firm financial performance in South Africa. When CSR is decomposed further into its major components, governance performance positively impacts a firm’s financial performance with no evidence of any relationship between social components and firm performance and between environmental components and firm performance. The positive impact of CSR on firm performance is greater in big firms. At the industry level, CSR is noticed to impact positively on financial performance in the extractive industry via good governance and responsible environmental behaviors. It however has no impact on firm performance in the financial sector. Research limitations/implications The results should be interpreted with caution and some limitations. Due to the limiting nature of the Public Investment Corporation data set (the survey was carried out on selected firms on the Johannesburg Stock Exchange for three years spanning from 2011 to 2013). This resulted in a sample of 56 firms. It is therefore very problematic to generalize the findings to a larger population over a long period of time. This is more limiting especially on individual sector studies where the sample has further shrunk to a smaller sample. As a result of the smaller sample size, the authors were unable to explore some other sectors which could have given more revealing findings. The authors recommend that future research should explore other data sets or use primary data approach that can allow for more sample size and elongated time period for a more holistic view and for easy generalization of the findings. The authors also identify an important lacuna necessitating further research effort. It would be interesting to empirically examine the threshold point of firms’ size beyond which CSR damages firms’ performance. Knowledge of this will guide managers of firms in their strategic CSR decision. Practical implications This study does not only serve as a reference work for subsequent investigations into the impact of CSR on firm performance in sub-Saharan Africa but also serves as a guide to policymakers on the financial impact of CSR adoption. Originality/value This study is one of the pioneering works that comprehensively examines the effect of CSR on financial performance amongst South African firms via size and sector and also controls for contemporaneous cross-correlation effects from the firms in the panel set.

To list or not to list, that is the question: new evidence from the performance of Vietnamese commercial banks

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tuan Quoc Le ◽  
Ha Ngan Duong ◽  
Phuong Thanh Nguyen
Keyword(s):  
Initial Public Offering ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Positive Impact ◽  
Policy Implications ◽  
Bank Performance ◽  
Data Set ◽  
Going Public ◽  
Content Type ◽  
The Impact

Purpose This paper aims to investigate the decisions of listing for Vietnamese banks and the impact of listing on bank performance. Design/methodology/approach A longitudinal data set of 30 commercial banks in the period of 2006–2018 with various univariate and multivariate tests is used. Findings This study found that listing is positively associated with bank profitability. The results are consistent even after the control for potential endogeneity problems by propensity score matching methodology and Heckman selection bias models. Further analysis suggests some new alternative channels for the positive impact, namely, the increased quality of information disclosure, technological development and income diversification of commercial banks after listing. Practical implications Hence, this paper provides recommendations and policy implications for regulatory bodies regarding the listing of commercial banks in Vietnam. Originality/value The contributions to the literature are three-folds. First, this study contributes to a strand of literature on the impact of going public [initial public offering (IPO)/listing] of financial institutions on their performance. While the literature on non-financial firm performance post-going public is ample, few have directly considered the IPO/listing of banks and other financial institutions. Second, in further looking at the impact of listing on bank performance, this study also sheds some light on the new possible channels of the effect and provides evidence of new channels. Then, last but not least, the case of Vietnam could possibly yield interesting results for a transitory stock market. From the evidence, the recommendations and policy implications for a listing of Vietnamese banks are provided.

CEO board membership: implications for firm value

2018 ◽  
Vol 30 (3) ◽  
pp. 352-370
Author(s):  
Michelle Li ◽  
Helen Roberts
Keyword(s):  
Firm Performance ◽  
Firm Value ◽  
Information Transfer ◽  
Positive Impact ◽  
Board Members ◽  
Data Set ◽  
Content Type ◽  
Board Membership ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to examine the relation between CEO board membership and firm performance. Design/methodology/approach This paper investigates the relationship between firm performance and CEO board membership, applying two-stage least squares, propensity score matching and correcting for self-selection bias across a unique sample of publicly listed New Zealand firms that demonstrate a definitive variation in CEO board membership. Findings This study finds that CEO board membership has a positive impact on firm performance, and these benefits are greater for more complex firms. Research limitations/implications Firms with CEOs independent of the board are associated with lower firm performance. The results are consistent with CEO board members providing an important information transfer mechanism to the board, resulting in an increase in average firm performance. This benefit is greater for larger firms with more business segments. Originality/value The paper tests for the impact of CEO board membership using a data set that demonstrates a definitive variation in CEO board membership.

Validating multidimensional entrepreneurial orientation in emerging economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kaustav Saha ◽  
Rohit Kumar ◽  
Swarup Kumar Dutta ◽  
Preeti Tiwari
Keyword(s):  
Firm Performance ◽  
Emerging Economies ◽  
Entrepreneurial Orientation ◽  
Positive Impact ◽  
New Ventures ◽  
Manufacturing Firms ◽  
New Venture ◽  
Primary Data ◽  
Data Set ◽  
Content Type

Purpose This study aims to examine the Lumpkin and Dess (1996) conceptualization of entrepreneurial orientation (EO) in an emerging economy, focusing on India. It ascertains the dimensions of EO that are valuable in securing superior firm performance in emerging economies, which might differ from a developed market setting. It further examines the difference in the significance of dimensions between the manufacturing and services industry. Design/methodology/approach A novel primary data set consisting of responses from 228 new ventures incorporated in India was created through an online questionnaire survey following the tailored design method principles. A disaggregated approach was adopted and the data were analyzed using multiple regression in SPSS 21. Findings Among the dimensions of EO, competitive aggressiveness positively affected new venture performance, whereas proactiveness did not show any effect. Autonomy also exhibited a positive impact, except for new venture growth in manufacturing firms. Innovativeness exhibited partial support, only for the effectiveness of service firms. Risking-taking exhibited a negative effect on performance, particularly for manufacturing firms. Practical implications The findings guide entrepreneurs and managers operating their new ventures in emerging economies by suggesting the dimensions that are most likely to benefit firm performance and those that might be detrimental. Originality/value This study empirically validates the multidimensional conceptualization of EO in India and extends previous studies, which have typically focused on an aggregated EO scale. This study’s findings attest that the manifestation of EO in emerging economies might be different compared to mature economies. The contrast between the manufacturing and service sectors is also shown.

Do intraday week effect in currencies hourly trading reflect leverage and asymmetric anomalies? Policy implications for traders

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wajid Shakeel Ahmed ◽  
Muhammad Sohaib ◽  
Jamal Maqsood ◽  
Ateeb Siddiqui
Keyword(s):  
Emerging Economies ◽  
Garch Model ◽  
Study Data ◽  
Policy Implications ◽  
Asymmetric Effect ◽  
Data Set ◽  
Content Type ◽  
Study Results ◽  
Rational Choices ◽  
Trading Pattern

Purpose The purpose of this study is to determine if intraday week (IDW) effect of the currencies reflect leverage and asymmetric impact in currencies market. The study data set comprises of intraday patterns of 15 currencies from developed and emerging economies. Design methodology approach The study applies the exponential generalized autoregressive conditional heteroscedasticity (E-GARCH) model technique to observe the IDW leverage and asymmetric effect after introducing hourly dummies variables, namely, IDWmon, IDWwed, IDWfrid and IDWfrid-mon. Findings The study results favor the propositions and confirm that IDW effect do exist in the international forex markets in relation to hourly trading pattern for respective currencies. Mostly, currencies do depreciate on Monday and Wednesday compared to the rest of the days. However, on the last trading day, i.e. Friday currencies observe an appreciation pattern which is for both economies. The results have an evidence of leverage and asymmetric effect confirmed by the E-GARCH model as a result of press releases and influence by micro-factors in the currency markets. Practical implications The study believes to have theoretical connection related to the better understanding of currencies trend for developed and emerging economies, as the IDW effect exists. Moreover, confirmation of both the leverage and asymmetric effect in observed currencies would be able to assist the investors in making rational choices during the trading hours and would confirm considerable profits through profit incentivized strategies. Originality value The study not only add knowledge to the previous study work in relation to the hourly trading pattern of currencies with reference to the IDW effects but also highlights the leverage and asymmetric effect in currencies that will help in formulating future trading strategies particular to emerging economies.

Corporate governance and firm performance: empirical evidence from Pakistan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Farooq ◽  
Amna Noor ◽  
Shoukat Ali
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Firm Size ◽  
Good Governance ◽  
Positive Impact ◽  
Least Square ◽  
Local Context ◽  
Content Type ◽  
Governance Index ◽  
Governance Quality

Purpose The purpose of this research is to look into the governance–performance relationship in the context of critical firm characteristics, such as firm size. Design/methodology/approach Based on total assets, sample firms were classified as small or large. The governance index, which is based on 29 governance provisions covering the audit committee, board committee, ownership and compensation structure of the respective firm, measures governance quality among sample firms. A higher governance index indicates a higher level of governance quality and vice versa. Accounting and market value measures are used to determine firm profitability. The authors used the two-stage least square (2SLS) method of estimation of the model to eliminate the simultaneous equation bias. Findings Corporate governance (CG) appears to have a positive impact on accounting return and market indices (Tobin’s Q), but it has little impact on return on equity. In terms of firm size, larger companies profited more from better governance implementation than smaller firms that lacked these principles, thus improving CG. The findings indicate that small businesses should improve their governance mechanisms to reap the benefits of CG in terms of increased profitability. Research limitations/implications There are certain drawbacks to this research. First, the authors omitted qualitative aspects of CG from the CG index, such as the board’s decision-making process, directors’ perceptions of the board’s position and directors’ age and qualifications. Such a qualitative component will improve the governance index in the future while building the governance index. Second, as the current study only looks at the nonfinancial sector, caution should be exercised before applying the findings to the entire population. Practical implications The findings show that companies that follow good governance standards have better accounting and market efficiency than those that do not. As a result, good governance practices can help firms in developing countries improve their performance. Academic researchers, regulators, investors, lenders and practitioners can find the findings useful in establishing a true relationship between firm performance and CG practices in Pakistan. Originality/value The relationship between governance and profitability in the context of firm size is examined in this research. Firms with varying resources and ability to implement CG codes have varying effects on profitability. To the authors’ knowledge, there was a gap in the literature that addressed this topic in the local context.

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