When does it make sense to focus business portfolios? A study of business group responses to institutional change in India

2017 ◽  
Vol 11 (4) ◽  
pp. 466-480
Author(s):  
Kannan Ramaswamy ◽  
Saptarshi Purkayastha
Keyword(s):  
Group Performance ◽  
Business Groups ◽  
Ordinary Least Squares ◽  
Performance Outcomes ◽  
Superior Performance ◽  
Market Reforms ◽  
Temporal Dimension ◽  
Content Type ◽  
Performance Consequences ◽  
The Government

Purpose This paper aims to report the findings from a longitudinal study of Indian business groups responding to the pro-market reforms that the government had initiated. It explores their diversification choices at the group level and the group performance consequences of these choices during a period of institutional changes (1990-2008). Design/methodology/approach Ordinary least squares regressions were used to analyze data spanning the 1988-2008 study period for 98 Indian business groups. Findings Results show that business groups that focused their portfolios in the early stages of institutional reforms tended to perform worse than their counterparts that did not do so. However, as market reforms became more established, business groups that made the transition from an unfocused to a more focused portfolio experienced superior performance consequences. Originality/value The findings underscore the temporal dimension of focusing and suggest that both changing strategy by refocusing business portfolio too early or waiting too long to refocus can hurt performance outcomes.

Bank competition, government intervention and SME debt financing

2017 ◽  
Vol 7 (4) ◽  
pp. 478-492 ◽  
Author(s):  
Jianhua Du ◽  
Chao Bian ◽  
Christopher Gan
Keyword(s):  
Government Intervention ◽  
Generalized Method Of Moments ◽  
External Debt ◽  
Ordinary Least Squares ◽  
Debt Financing ◽  
Bank Loans ◽  
Bank Competition ◽  
Firm Level ◽  
Content Type ◽  
The Government

Purpose The purpose of this paper is to examine the effects of the government intervention and bank competition on small and medium enterprise (SME) external debt financing in Chinese capital market. Design/methodology/approach This study uses ordinary least squares with standard errors clustered at the firm level. In addition, the authors use the dynamic system generalized method of moments to address the possible endogeneity issue in the regressions. Findings Using a sample of 908 firms from 2000 to 2010, the authors found that SMEs are more likely to access bank loans only in regions with higher level of government intervention than median government intervention. Further, the result shows that the government is motivated to help SMEs to obtain more external debt in regions where the level of bank competition is lower than the median bank competition index. Last, the authors found evidence that firms with politically connected CEOs are likely to access bank loans. Research limitations/implications This paper highlights that government intervention enables the SMEs to secure more bank loans. Second, the authors’ results imply that the government is motivated to help SMEs to obtain more external debt in regions with low level of bank competition. Originality/value This study contributes to the current literature by revealing that government intervention is the driving force alleviating SMEs’ constraints in accessing external financing. Second, this study finds the evidence to supports the argument that government has a strong motive to help SMEs to secure long-term credits for political purpose (Fan et al., 2012), when the level of bank competition is low (Berger and Udell, 2006).

Does prospectus information matter in IPO pricing?

2018 ◽  
Vol 9 (4) ◽  
pp. 514-530 ◽  
Author(s):  
Rasidah Mohd-Rashid ◽  
Mansur Masih ◽  
Ruzita Abdul-Rahim ◽  
Norliza Che-Yahya
Keyword(s):  
Initial Public Offering ◽  
Institutional Investors ◽  
Ordinary Least Squares ◽  
Quadratic Model ◽  
Cross Sectional ◽  
Content Type ◽  
Ipo Pricing ◽  
The Government ◽  
Public Offering ◽  
Lower Uncertainty

Purpose The purpose of this study is to identify selected information from the prospectus that might signal the initial public offering (IPO) offer price. Design/methodology/approach This study uses cross-sectional data for a 14-year period from 2000 to 2014 in examining hypotheses relating to Shariah-compliant status, institutional investors, underwriter ranking and shareholder retention, with respect to their associations with the offer price of the IPOs. Further, this study uses ordinary least squares (OLS) for all models, including the models for both subsamples of Shariah- and non-Shariah-compliant IPOs. As for robustness, this study incorporates the quantile regression and quadratic model. Findings The results tend to provide support for the argument that firms with Shariah-compliant status reflect lower uncertainty and project better signalling of quality due to greater scrutiny by the government and thus are able to offer IPOs at higher prices. Similarly, firms with a higher proportion of shareholder retention indicate lower risks as insiders forego their options to diversify their portfolio, and hence could price their IPOs higher. Finally, the involvement of institutional investors and higher underwriter ranking could be used by firms to disregard information asymmetry, and therefore, the issuer might have to discount the IPO offer price. Research limitations/implications This study focuses solely on information in the prospectus that should not be disregarded by the investors in valuing the appropriateness of the IPO offer price. This study contributes in terms of providing a better understanding of the determinant factors of the IPO offer price of the firms which are Shariah-compliant. Originality/value This paper provides evidence for the determinants of the IPO offer price in a fixed pricing mechanism for both Shariah-and non-Shariah-compliant IPOs.

Sleep late? Pre-reform institutional embeddedness and entrepreneurial reinvestment of private firms in China’s transition economy

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Di Song ◽  
Aiqi Wu ◽  
Xiaotong Zhong ◽  
Shufan Yu
Keyword(s):  
Decision Making ◽  
Transition Economy ◽  
Transition Period ◽  
Negative Impact ◽  
Ordinary Least Squares ◽  
Negative Influence ◽  
Private Firms ◽  
Temporal Dimension ◽  
Content Type ◽  
Institutional Embeddedness

Purpose This study aims to introduce an important temporal dimension to the research on institution and entrepreneurship in the transition period. This study develops the concept of pre-reform institutional embeddedness, and explores its impact on entrepreneurial reinvestment of private firms in China’s transition economy. Design/methodology/approach The authors used secondary data of a nationally representative sample of China’s private firms collected in the early days of the institutional transition period and applied ordinary least squares regressions and the Baron and Kenny approach to test the theoretical model. Findings Pre-reform institutional embeddedness has a negative impact on entrepreneurial reinvestment of private firms in the transition period. This relationship is mediated by guanxi-induced employment, such that pre-reform institutional embeddedness promotes guanxi-induced employment, which in turn discourages a private firm to reinvest. Additionally, the negative impact of guanxi-induced employment on entrepreneurial reinvestment is reduced when decentralization of decision-making is used. Practical implications First, entrepreneurs should be aware of pre-reform institutional embeddedness’ negative influence on firms’ risk-taking abilities and incentives. Private firms already constrained by this connection could alleviate the negative impacts through a widespread delegation of decision-making authority. Second, policymakers should be cautious about improper government-business relationships, which may discourage private firms from fully pursuing entrepreneurial growth opportunities. Originality/value This paper makes theoretical contributions to the literature on entrepreneurial reinvestment, embeddedness perspective of entrepreneurship and imprinting theory.

An empirical investigation of buyer–supplier relationship typologies and their behavioral and performance outcomes

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jin Li ◽  
Linlin Chai ◽  
Chanchai Tangpong ◽  
Michelle Hong ◽  
Rodney D. Traub
Keyword(s):  
Performance Measures ◽  
Online Survey ◽  
Performance Outcomes ◽  
Superior Performance ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Content Type ◽  
Behavioral Dynamics ◽  
And Performance ◽  
Supplier Relationship

Purpose This study aims to examine empirically the existence of four classical and four emerging buyer–supplier relationship (BSR) types and how they differ in terms of behavioral dynamics and performance measures. Design/methodology/approach This study uses an online survey to collect data from 371 purchasing managers in the USA. Findings A cluster analysis statistically supports the existence of five of these eight BSR types, including strategic/bilateral partnership, market/discrete, supplier-led collaboration, captive supplier/buyer dominant and captive buyer/supplier dominant BSRs. Further, ANOVA tests show that these five BSRs differ in terms of behavioral outcomes and performance measures. Research limitations/implications This study is based on a cross-sectional survey so it cannot examine how these BSR types may evolve over time, and it is not suitable to examine some rare types of BSRs. In addition, this study does not consider contextual factors that may moderate the influence of BSR types on the behavioral dynamics and performance measures. Practical implications Managers should consider the potential to be able to develop and enhance a strategic/bilateral relationship with their supply chain partners, which in at least some circumstances can lead to superior performance results. Similar observations can be made with respect to supplier-led and, to a lesser degree, buyer-led collaboration. Originality/value Most existing research of the BSR types is largely a product of theoretical classifications, and there is also a lack of research of their performance implications. This study fills these gaps in the literature.

Does international expansion constrain growth? Business groups, internationalization, institutional distance, and the Penrose effect

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wen-Ting Lin ◽  
Ying-Yu Chen ◽  
David Ahlstrom ◽  
Linda C. Wang
Keyword(s):  
Information Processing ◽  
Firm Growth ◽  
Business Groups ◽  
Adjustment Costs ◽  
Ordinary Least Squares ◽  
Institutional Distance ◽  
Content Type ◽  
Managerial Resources ◽  
Penrose Effect ◽  
The Relationship

Purpose This paper aims to use the institutional and information-processing perspectives to explore their association with between internationalization and the Penrose effect phenomenon for business groups (BGs). Design/methodology/approach The authors use ordinary least squares regression models to test arguments about data pertaining to 101 Taiwanese BGs’ foreign direct investments. Findings The results indicate that greater levels of depth and scope in the process of internationalization during one period may negatively affect rates of growth in the following period. The results further demonstrate that institutional distance moderates the relationship. Research limitations/implications Using the perspective of information-processing demands, the authors provide alternate explanations regarding the relationship between the process of internationalization (depth, scope and rhythm) and the Penrose effect. Originality/value Owners and managers should focus on both the depth and the scope of internationalization. BGs are likely to incur high dynamic adjustment costs, which then limit the rate of BGs’ growth. Managers should balance international market uncertainty with current managerial resources when determining how deeply and broadly to expand internationally and where to enter. In addition, as recent major panel studies suggest, management capabilities and practices can improve significantly, which has a positive effect on firm growth and performance. This does require the careful development and acquisition of the managerial resources needed for internationalization.

Bolivia's business elites have shifted to Morales

2017 ◽  
Keyword(s):  
Business Groups ◽  
Political Stability ◽  
Economic Conditions ◽  
The Political ◽  
Political Elites ◽  
Economic Policies ◽  
Business Elites ◽  
Content Type ◽  
Collaborative Working ◽  
The Government

Subject Government-business relations. Significance President Evo Morales’s government has established a collaborative working relationship with the country’s most powerful business elites that belies its leftist rhetoric. This is based on an understanding that while government offers large corporate interests favourable economic conditions, business groups will refrain from conspiring against the government in the political sphere. Thus, the government has managed to minimise the sort of pro-regional tensions that characterised its first term in office (2006-10), driving a wedge between economic and political elites. Impacts The economic policies pursued by the Morales administration will continue to prove, broadly, good for business. Smaller-scale businesses have been less beneficially treated, but lack political lobbying power. Avoidance of strife with the more powerful business groups will continue to help underpin political stability.

Learning organization and firm performance

2018 ◽  
Vol 13 (4) ◽  
pp. 689-708
Author(s):  
C. Muhammad Siddique
Keyword(s):  
Resource Management ◽  
Firm Performance ◽  
Human Resource Management ◽  
Human Resource ◽  
Learning Organization ◽  
Organizational Support ◽  
Performance Outcomes ◽  
Superior Performance ◽  
Gulf Region ◽  
Content Type

Purpose The purpose of this paper is to identify organizational resources that may enhance the performance outcomes of a learning culture; this study was undertaken in the United Arab Emirates (UAE), an emerging economy in the Arabian Gulf region. Design/methodology/approach A survey questionnaire was used to collect data on a sample of 254 firms from the Emirates of Dubai and Abu Dhabi. The target respondents included middle to senior managers working in logistics, operations, finance and general management positions. Findings The data revealed a positive relationship between learning organization (LO) initiatives and four measures of firm performance considered in the study: employee skills development, product/service innovation, cost-effectiveness and growth in revenues. This relationship was moderated by strategic orientation of the human resource management function and perceived organizational support. Effective HRM strategies and organizational support systems were identified as critical resources that can add substantial value to the performance outcomes of an LO culture. These findings suggest that investing in the development of an LO culture makes a good business sense. Research limitations/implications Use of perceptual measures was one of the major limitations of the present study. Practical implications The largely positive impact of LO-related programs underscores the strategic importance of the LO concept to maintain superior performance outcomes in the emerging knowledge economy of UAE. Originality/value The paper represents an initial effort at making a business case for the LO concept in a non-western context. It brings into focus the role of organizational support and strategically oriented human resource management initiatives in optimizing the performance impact an LO culture.

Mediators of ethical leadership and group performance outcomes

2017 ◽  
Vol 32 (7) ◽  
pp. 484-496 ◽  
Author(s):  
J.C. Peng ◽  
Julian Lin
Keyword(s):  
Ethical Leadership ◽  
Group Performance ◽  
Leadership Behaviors ◽  
Value Congruence ◽  
Performance Outcomes ◽  
Group Level ◽  
Content Type ◽  
The Relationship ◽  
Group Trust ◽  
Level Performance

Purpose The purpose of this paper is to examine the relationship between ethical leadership and group-level performance outcomes and show that group value congruence and group trust play pivotal mediating roles in the relationship between ethical leadership and work group performance outcomes. Design/methodology/approach To examine the proposed model, survey data from 116 branches of a baked goods and beverages chain located in Northern Taiwan were analyzed. Findings The results revealed that ethical leadership was positively and significantly related to group in-role performance and group helping behavior; the relationship was fully mediated by group value congruence and group trust after controlling for idealized influence leadership. Research limitations/implications This study features a cross-sectional study design, thus limiting the accuracy of inferences about causality. Practical implications The results of the current study revealed that ethical leadership behaviors enhance group trust. Hence, these leadership behaviors could be among the best and most appropriate practices to be implemented in China and Taiwan. Originality/value The data suggested that ethical leadership was associated with not only individual-level behavior but also group-level performance. Furthermore, this paper also uncovered the mediation mechanism through which ethical leadership enhances group performance.

Empirical perspectives of transactive memory systems: a meta-analysis

2020 ◽  
Vol 26 (7/8) ◽  
pp. 409-427
Author(s):  
Zikai Zhou ◽  
Pilar Pazos
Keyword(s):  
Team Effectiveness ◽  
Group Performance ◽  
Memory Systems ◽  
Transactive Memory ◽  
Performance Outcomes ◽  
The Body ◽  
Transactive Memory Systems ◽  
Affective Outcomes ◽  
Content Type ◽  
Team Outcomes

Purpose The purpose of this study is to synthesize the previous empirical studies on transactive memory systems (TMS) through a meta-analytical approach and test the proposed model for the relationships between TMS and different types of team outcomes. Design/methodology/approach TMS refers to shared memory systems developed among a group of people for encoding, storage and retrieval of their different knowledge domains. They have been widely used in group or organization settings to describe the cumulative knowledge in a group of multi-disciplinary experts. Previous literature suggests TMS as a critical concept for explaining group performance, but few studies were conducted to integrate the literature findings to identify the relationships between TMS and team outcomes. Findings The findings suggest that TMS is more strongly linked to affective outcomes than behavioral or performance outcomes. In addition, the authors find that the specific operationalization of TMS does not affect the relationship between TMS and team outcomes. There was not enough support for significant effects of group size and research setting on the relationships between TMS and team outcomes, which indicates that both laboratory and field studies have similar potential to generate valuable results for the research of TMS. Originality/value This study contributes to the body of knowledge on team effectiveness by investigating the links between TMS and team effectiveness through a broad definition of outcomes that include tangible constructs, such as performance, as well as behavioral and affective outcomes. By exploring the relationships through this broad conceptualization of team effectiveness, the authors can better understand the particular effects of TMS on different key aspects used to determine success in teams.

Decoding the elemental arcs of superior performance in sustainable supply chains

2019 ◽  
Vol 57 (9) ◽  
pp. 2570-2592 ◽  
Author(s):  
Vivek Roy
Keyword(s):  
Supply Chain ◽  
Knowledge Transfer ◽  
Knowledge Base ◽  
Performance Outcomes ◽  
Superior Performance ◽  
Learning Orientation ◽  
Sustainable Supply Chain ◽  
Content Type ◽  
Sustainable Supply Chains ◽  
Knowledge Based

Purpose The purpose of this paper is to delve into the intricate depths surrounding the development of sustainable supply chains by conceptualizing the elemental aspects of superior performance in sustainable supply chain management (SSCM). Design/methodology/approach The paper is conceptual in nature and is grounded in the theories of SSCM and knowledge-based view. Findings The findings outline the elemental background processes governing the implementation of SSCM practices and superior performance outcomes. The conceptualization suggests that the superior performance of a sustainable supply chain is elementally dependent on the intricate efforts – to enrich the supply chain knowledge base with perspectives on SSCM. Thereby, these intricate efforts are delineated along the arcs of supply chain leadership, supply chain learning orientation, supply chain knowledge management (SCKM) and supply chain knowledge transfer. As such, while an SSCM orientation within the supply chain leadership is helpful in offsetting the inertia among the supply chain members to channelize intricate efforts in SSCM, the SSCM-based supply chain learning orientation further orientates the SSCM efforts of supply chain members toward the excavation of new knowledge in the frame of SSCM. Subsequently, the arcs of SSCM-based SCKM and SSCM-based supply chain knowledge transfer characterize the finer spaces of knowledge excavating actions, essential for enriching the supply chain knowledge base with perspectives on SSCM. Originality/value This conceptualization facilitates intriguing theoretical explanations to the linkage between SSCM implementation and superior performance outcomes. Specifically, from the knowledge-based angle, it delineates the root causes governing the superior/inferior nature of SSCM outcomes.

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