Firm characteristics, innovation, financial resilience and survival of financial institutions

2019 ◽  
Vol 10 (1) ◽  
pp. 48-73
Author(s):  
Stephen Korutaro Nkundabanyanga ◽  
Elizabeth Mugumya ◽  
Irene Nalukenge ◽  
Moses Muhwezi ◽  
Grace Muganga Najjemba
Keyword(s):  
Financial Institutions ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Firm Characteristics ◽  
Cross Sectional ◽  
Firm Innovation ◽  
Content Type ◽  
Going Concern ◽  
Innovation Activities ◽  
The Social

Purpose The purpose of this paper is to examine the relationship among firm characteristics, innovation, financial resilience and survival of financial institutions in Uganda. Design/methodology/approach This paper employs a cross-sectional research design, and responses from 143 officers of 40 financial institutions are analyzed using Statistical Package for the Social Sciences. The authors used ordinary least squares regression in testing the hypotheses. Findings The authors find that firm characteristics of size, age, innovation and financial resilience have a predictive force on survival of public interest firms such as financial institutions. Research limitations/implications The implication drawn here is that a combination of firm characteristics, firm innovation and financial resilience explains a significant contribution in the survival chances of financial institutions. However, as much as firm characteristics and financial resilience are significant, innovation explains more of the variances in financial institutions’ going concern appropriateness. Originality/value This paper adds to the limited financial institutions literature and provides the first empirical evidence of the efficacy of innovation and financial resilience on financial institutions survival. The auditing profession could consider more seriously the innovation activities and financial resilience of financial institutions in their test for the going concern assumption of such firms.

She-E-Os and innovation: do female CEOs influence firm innovation?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hafiz Mustansar Javaid ◽  
Qurat Ul Ain ◽  
Antonio Renzi
Keyword(s):  
Financial Constraints ◽  
Ordinary Least Squares ◽  
State Ownership ◽  
Corporate Environment ◽  
Firm Innovation ◽  
Content Type ◽  
Innovation Activities ◽  
Female Ceos ◽  
Innovation Output ◽  
The Impact

PurposeThis paper empirically investigates whether female CEOs (She-E-Os) have an effect on firm innovation among Chinese listed firms based on patent data. This study also delved further by looking at whether the internal corporate environment moderates the effect of female CEOs on innovation, that is, state ownership. Finally, this study investigates an additional test of financial constraints to examine whether financial constraints also moderate the impact of female CEOs on firm innovation.Design/methodology/approachThis study used the data of all A-share listed companies on the Shanghai and Shenzhen stock exchanges for the period from 2008 to 2017. The authors use ordinary least squares regression as a baseline methodology, along with firm-fixed effect, lagged measure of female CEOs, alternative measures of innovation, Heckman two-step model and negative binomial regression to check and control the possible issue of endogeneity.FindingsThe authors’ findings show that CEO gender plays an important role in producing higher levels of innovation output by improving the governance structure. However, female CEOs have no effect on state-owned enterprises' (SOEs) innovation activities, which suggests that the main goal of SOEs is achieving sociopolitical objectives. Furthermore, female CEOs' influence on innovation output is weaker in firms with financial constraints.Social implicationsThis study adds to the emerging global discussion on gender diversity. Many legislative bodies require a quota for women on corporate boards due to gender inequality. This study's findings reinforce such guidelines by emphasizing the economic benefits of including women in top management positions.Originality/valueThis study provides new insights by highlighting the role of female CEOs in increasing firms' innovation activities. Additionally, this study provides evidence on whether the internal corporate environment (state ownership and financial constraints) moderates female CEOs' effect on innovation.

The effect of the financial crisis on audit quality: European evidence

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maria I. Kyriakou
Keyword(s):  
Financial Crisis ◽  
Audit Quality ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Cross Sectional ◽  
Accounting Firms ◽  
Content Type ◽  
Financial Firms ◽  
The Impact ◽  
Big Four

Purpose This paper aims to examine the impact of the recent financial crisis on audit quality by analysing discretionary accruals. Design/methodology/approach This study considers a sample of German, French, Italian and Spanish non-financial firms from 2005 to 2013 to investigate the auditor’s independence. It uses a cross-sectional and time-series ordinary least squares regression model to control for other predictors of the auditor’s independence when the financial crisis produces a decrease in audit quality. Findings The proportion of the non-financial firms having lower audit quality was higher during the financial crisis. In addition, during the crisis auditors were less likely to provide a higher audit quality for these non-financial firms. The level of audit quality returned to normal levels during the post-crisis years when the crisis had ceased. Originality/value These findings contribute to the literature on the impact of economic and financial changes on audit quality. In addition, this research finds that the Big Four accounting firms provide a higher audit quality in different circumstances from non-Big Four accounting firms, and that audit quality decreased during the crisis and returned to normal in the post-crisis period.

Large shareholder participation behaviors, managers’ risk-taking and firm innovation performance

2018 ◽  
Vol 9 (1) ◽  
pp. 99-115 ◽  
Author(s):  
Feng Zhang ◽  
Jianjun Yang ◽  
Zhi Xu ◽  
Guilong Zhu
Keyword(s):  
Risk Taking ◽  
Ordinary Least Squares ◽  
Innovation Performance ◽  
Least Squares Regression ◽  
Firm Innovation ◽  
Content Type ◽  
Chinese Firm ◽  
Large Shareholder ◽  
Strategic Consensus ◽  
Large Shareholders

Purpose Focusing on internal corporate governance, the purpose of this paper is to apply the shareholder activism perspective to consider how large shareholder participation behaviors might influence firm innovation performance. Specifically, “confrontationally strategic intervention” and “cooperatively strategic consensus” participation behaviors are examined and hypothesized to have different effects on managers’ risk-taking and firm innovation performance. Design/methodology/approach Drawing on 182 Chinese firm samples, this paper applies hierarchical ordinary least-squares regression analysis to test the proposed hypotheses. Findings The results show that strategic intervention was negatively associated with managers’ risk-taking and firm innovation performance, while strategic consensus positively affected managers’ risk-taking and firm innovation performance. Moreover, managers’ risk-taking fully mediated the influence of strategic intervention on firm innovation performance, whereas it partially mediated the influence of strategic consensus on firm innovation performance. Originality/value The study extends research on shareholder participation by construing that large shareholders’ participation behaviors can significantly influence managers’ risk-taking and corporate innovation performance, further deepening the understanding of the influences of large shareholders on the firm-level outcomes. The theoretical and practical implications of this finding are also discussed.

scholarly journals Company specific determinants of greenhouse gases disclosures

2014 ◽  
Vol 15 (3) ◽  
pp. 323-338 ◽  
Author(s):  
Lyton Chithambo ◽  
Venancio Tauringana
Keyword(s):  
Web Sites ◽  
Capital Expenditure ◽  
Ordinary Least Squares ◽  
Annual Reports ◽  
Least Squares Regression ◽  
Cross Sectional ◽  
Content Type ◽  
Consumer Services ◽  
Specific Factors ◽  
The Relationship

Purpose – The purpose of this paper is to investigate the relationship between company-specific factors and the extent of greenhouse gas (GHG) disclosures. Design/methodology/approach – The study is based on a sample of 210 FTSE 350 companies and uses the disclosure index to quantify GHG disclosures made in the annual reports, sustainability reports and web sites in 2011. Ordinary least squares regression is employed to model the relationship between the company-specific factors and the extent of GHG disclosures. Findings – The results indicate that company size, gearing, financial slack and two industries (consumer services and industrials) are significantly associated with GHG disclosures while profitability, liquidity and capital expenditure are not. When the authors disaggregate GHG disclosures into qualitative and quantitative, the results suggest that the effect of some company factors differ depending on the type of GHG disclosures. Research limitations/implications – The study is cross-sectional. A longitudinal study is necessary to understand the dynamics of GHG disclosures as firms may change their disclosure policy as the importance of GHG increases. The results imply that policy makers need to take into account certain company-specific factors when formulating policy aimed at improving GHG disclosures. Originality/value – The results add evidence to the growing body of research focusing on the relationship between company-specific factors and GHG disclosure. The study also provides evidence that the effect of some company-specific factors on GHG disclosures differ depending on whether the GHG disclosures are quantitative or qualitative.

scholarly journals Post-implementation analysis: dependence and trust in VMI context

2018 ◽  
Vol 48 (7) ◽  
pp. 724-740 ◽  
Author(s):  
Mehmet G. Yalcin ◽  
Koray Özpolat ◽  
Dara G. Schniederjans
Keyword(s):  
Inventory Management ◽  
Empirical Support ◽  
Ordinary Least Squares ◽  
Two Dimensions ◽  
Third Party ◽  
Least Squares Regression ◽  
Cross Sectional ◽  
Content Type ◽  
Relational Factors ◽  
Analytical Approaches

Purpose More than two decades long technological improvements in information sharing have not yet ensured a flawless execution of vendor managed inventory (VMI) and left interested parties wondering about the reasons of poor results. Although VMI is a collaborative tool, the relational factors in a VMI setting have not received enough attention due to challenges in obtaining relational buyer-supplier data in addition to extant focus on analytical approaches. The purpose of this paper is to investigate post-implementation relational factors in order to extract relevant insights. Design/methodology/approach Accounting for the duration of the VMI relationship, the authors focus on two dimensions of VMI often ignored post-implementation: dependence of the buyer on the VMI-supplier and trust of the buyer in the VMI-supplier. Cross-sectional data were collected using a survey collected from distributors mostly in auto and electrical supply industries, which have their inventories managed by manufacturers through VMI arrangements. The sample was obtained from a leading third-party VMI-platform service provider that serves thousands of distributor-manufacturer locations with billions of dollars in sales orders. Multiple ordinary least squares regression has been used to test the hypotheses. Findings This paper provides empirical support that in the post-implementation stage, longer VMI relationships are associated with higher distributor dependence on the manufacturer. In addition, too much dependence could actually hurt the distributor’s trust in the manufacturer. Practical implications The authors propose that distributors maintain some of the purchasing and inventory management skills in house to limit their dependencies on the manufacturers. Manufacturers should also invest in trust-building activities, such as regular communications with distributors. Originality/value This is the first study providing empirical evidence on the positive association between length of VMI relationship and buyer dependence on the supplier, and curvilinear dependence-trust link in a post-implementation VMI context.

scholarly journals Debt financing and firm performance: empirical evidence from the Pakistan Stock Exchange

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aamir Nazir ◽  
Muhammad Azam ◽  
Muhammed Usman Khalid
Keyword(s):  
Firm Performance ◽  
Stock Exchange ◽  
Ordinary Least Squares ◽  
Debt Financing ◽  
Least Squares Regression ◽  
Cross Sectional ◽  
Content Type ◽  
Random Effects Models ◽  
Debt Level ◽  
Positive Effects

PurposeThe purpose of this study is to investigate the relationship between the listed firms' debt level and performance on the Pakistan Stock Exchange (PSX) during a five-year period.Design/methodology/approachThis study uses pooled ordinary least squares regression and fixed- and random-effects models to analyse a cross-sectional sample of 30 Pakistani companies operating in the automobile, cement and sugar sectors during 2013–2017 (N = 150).FindingsThe results indicate that both short- and long-term debt have negative and significant impacts on firm performance in profitability. This suggests that agency issues may lead to a high-debt policy, resulting in lower performance. However, both sales growth and firm size have positive effects on the profitability of non-financial sector companies.Research limitations/implicationsThis study suggests that when debt financing significantly and negatively influences firm profitability, company owners and managers should focus on finding a satisfactory debt level. However, this study is limited to the automobile, cement and sugar sectors of Pakistan. Future studies could address other sectors, such as textiles, fertilizers and pharmaceuticals.Originality/valueThis study focusses on enhancing the existing empirical knowledge of debt financing's influence on the PSX's major sectors' profitability.

The grey areas of Internet use: secret affairs in cyberspace and religiosity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wilson Weixun Li ◽  
Alvin Chung Man Leung ◽  
Wei T. Yue
Keyword(s):  
Least Squares ◽  
Negative Relationship ◽  
Spillover Effects ◽  
Ordinary Least Squares ◽  
Deterrent Effect ◽  
Least Squares Regression ◽  
Cross Sectional ◽  
Content Type ◽  
Deviant Behaviors ◽  
Extramarital Affairs

PurposeThe anonymity of the Internet supports an increasing number of deviant behaviors such as secret affairs. This paper aims to investigate whether religiosity has a negative relationship with the incidence of secret affairs in cyberspace and how it moderates the substitution effect between the use of online and off-line channels for such deviant behaviors.Design/methodology/approachThe authors constructed a cross-sectional county-level dataset containing data on US religious adherents' ratios and actual expenditures on a social website related to extramarital affairs. The data were analyzed by ordinary least squares and two-stage least squares regression models.FindingsIn general, religiosity has a negative relationship with secret affairs in cyberspace. It also moderates the relationship between using online (secret affairs websites) and off-line (entertainment facilities) channels for extramarital affairs. The deterrent effect of religiosity is weakened in religious communities with diversified religious teachings/structures and stricter requirements.Originality/valueThis work enriches the understanding of the role of religiosity in online deviant behaviors and provides essential insights for policymakers (e.g. in relation to spillover effects of social norms in cyberspace).

scholarly journals Family board ownership, generational involvement and performance in family SMEs

2019 ◽  
Vol 28 (3) ◽  
pp. 285-300 ◽  
Author(s):  
Amaia Maseda ◽  
Txomin Iturralde ◽  
Gloria Aparicio ◽  
Lotfi Boulkeroua ◽  
Sarah Cooper
Keyword(s):  
Firm Performance ◽  
Board Of Directors ◽  
Family Firms ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Cross Sectional ◽  
Content Type ◽  
The Board Of Directors ◽  
Family Smes ◽  
Board Ownership

Purpose In order to deepen our knowledge of governance of family firms, the purpose of this paper is to focus our attention on the relation between family owners who are members of the board of directors and firm performance. Also, this study sheds more light on how the generation in charge of the family firm affects that relationship, as generational involvement may be a unique predictor of governance behavior in these firms. Design/methodology/approach The authors applied a cross-sectional ordinary least squares regression model to test the hypotheses on a sample of 313 non-listed Spanish family SMEs. The authors suggest the possibility of a non-linear relationship between the percentage of ownership by family members of the board of directors and firm performance, and specifically, the authors propose an S-shaped effect that implies two breakpoints. Findings The authors find not only that an inverted U-shaped relationship exists, but also an S-shaped relationship between family board members’ ownership and firm performance in family SMEs. Nevertheless, the results are different in comparing first-, second- and later-generation family firms. Originality/value This is one of the few empirical studies that examine the relationship between family board ownership and firm performance in the context of non-listed family SMEs. The authors consider that the influences of family directors on the board of directors as well as the concentration of family ownership on the board of directors are worth studying in non-listed family SMEs. Moreover, previous studies have focused mainly on large listed family firms but not on unlisted ones.

Diversity and the Performance of Selected Financial Institutions of Asia

2018 ◽  
Vol 2 (1) ◽  
pp. 1
Author(s):  
Shafaque Fatima ◽  
Saqib Sharif
Keyword(s):  
Financial Institutions ◽  
Positive Impact ◽  
Financial Institution ◽  
Gender Diversity ◽  
Business Case ◽  
Ordinary Least Squares ◽  
Cross Sectional ◽  
Age Diversity ◽  
The Impact ◽  
Nationality Diversity

Linking with the business case for diversity, this study examines whether the top management team (TMT) and the board of directors (BODs) diversity has a positive impact on financial institution (FI) performance in select countries of Asia least researched domain. We use data from 119 financial institutions across Asia for the year 2015, initially 1,447 institutions; however, incomplete data was excluded from final analysis. We use three proxies for diversity, that is, nationality diversity, gender diversity, and age diversity of TMT and BODs. To investigate the impact of TMT and BODs diversity, cross-sectional ordinary least-squares estimation is applied, using Return on Average Assets (ROAA%) as a measure of performance.  We find that nationality diversity and age diversity is positively and significantly related to FIs performance. Our evidence indicates that executives and board members with diverse exposure and younger age improve FIs profitability. However, there is no significant relationship between gender and FIs performance.

Clients’ means of influence on mortgage valuation in Nigeria

2015 ◽  
Vol 33 (4) ◽  
pp. 367-385 ◽  
Author(s):  
Chukwuma C. Nwuba ◽  
Uche S. Egwuatu ◽  
Babatunde M. Salawu
Keyword(s):  
Risk Mitigation ◽  
Hierarchical Linear Model ◽  
Firm Characteristics ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Content Type ◽  
Mortgage Valuation ◽  
Research Designs ◽  
Client Pressure ◽  
The Impact

Purpose – The purpose of this paper is to investigate client influence on mortgage valuation in Nigeria to establish and rank the means of influence clients employ, and the impact of firm characteristics on client influence. Design/methodology/approach – A combination of cross-sectional survey and focus groups research designs was adopted. Questionnaire structured on five-point Likert format was used to collect data from a sample of valuation firms in five Nigerian cities. Descriptive statistics, χ2, and moderated hierarchical linear model were used for data analysis. Findings – Clients’ means of influence on valuation are more of subtle approach than threat or coercion. The most prevalent means are respectively, plea for assistance, promise of continued retainership on banks’ valuer panels, and disclosing the loan amount. Client influence differs across cities; firm characteristics have no influence on client pressure. Practical implications – The research provides basis for valuation bodies to review practice rules and standards and seek for legislation for valuer independence. It can serve as material for teaching and training in professional ethics. Social implications – Biased valuations jeopardises credit risk mitigation process with potential for destabilising banks, finance sector, and consequences for the economy. Originality/value – The study provides empirical evidence of the nature of client influence across several major Nigerian cities. In contrast to existing Nigerian studies that focus on single cities, the study covers several cities. It therefore provides a broad basis for problem-solving and decision-making.

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