Locked-in resources, coopetitive relationship stability and innovation

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rida Elias ◽  
Bassam Farah
Keyword(s):  
Relationship Stability ◽  
Firm Level ◽  
Competitive Intensity ◽  
Content Type ◽  
Stable Relationship ◽  
Radical Innovations ◽  
Strategic Resources ◽  
Conceptual Paper ◽  
The Impact ◽  
The Relationship

PurposeThis conceptual paper uses the resource-based theory (RBT) of the firm to argue that for competitors to improve their innovation through a cooperative relationship – coopetitive relationship – they need to work on building a stable relationship with each other by investing a special type of resources, namely locked-in resources.Design/methodology/approachThe authors draw on RBT criteria to argue that when the antecedent – the locked-in resources – and the mediator – the relationship stability – are valuable, rare, inimitable and organized (VRIO), they will help the parties involved achieve sustained competitive advantage from the coopetitive relationship.FindingsThis paper argues that locked-in resources lead to higher coopetitive relationship stability by reducing the impact of opportunistic behavior from any of the partners. More stable relationship leads to more innovations especially radical innovations. In addition, the nature of the industry plays a moderating role. The industry's competitive intensity affects the relationship between locked-in resources and relationship stability. The industry's age affects the relationship between stability and innovation quantity and type.Research limitations/implicationsThis conceptual paper anchors its arguments within the RBT related to the firm's strategic resources (VRIO) characteristics and applies the same arguments (VRIO) beyond the firm level to the coopetitive relationship level. The model invites researchers and practitioners to consider two new constructs namely locked-in resources and coopetitive relationship stability in order to build successful coopetitive relationships.Practical implicationsThis paper contributes considerably and in a practical manner to managers as it draws their attention to the importance of investing a special type of resources, namely locked-in resources and ensuring the relationship stability with their coopetitors to achieve the desired outcome. It also draws the managers' attention to the impact industry's competitive intensity and industry's age have on the quality of the relationship and on the innovation outcomes.Originality/valueA distinct contribution of this conceptual paper is the introduction of two new constructs: locked-in resources and coopetitive relationship stability. Locked-in resources are valuable within the coopetitive relationship and they improve the second construct or relationship stability. Relationship stability is different from relationship strength as it leads to more trust between partners over longer periods of time.

New evidence of the relationship between employee satisfaction and firm economic performance

2015 ◽  
Vol 44 (6) ◽  
pp. 906-929 ◽  
Author(s):  
Santiago Melián-González ◽  
Jacques Bulchand-Gidumal ◽  
Beatriz González López-Valcárcel
Keyword(s):  
Firm Performance ◽  
Organizational Performance ◽  
Employee Satisfaction ◽  
Performance Outcomes ◽  
Firm Level ◽  
Content Type ◽  
Worker Satisfaction ◽  
The Impact ◽  
The Relationship ◽  
Level Performance

Purpose – Employee satisfaction appears in any discussion about how employees can contribute to organizational performance. The purpose of this paper is to test the relationship between employee satisfaction and organizational performance; this later measured with three firm-level performance outcomes (return over assets, operating margin, and revenue per employee). Design/methodology/approach – At different times and from two independent sources the authors obtained firms’ data about worker attitudes and financial and productivity performance, respectively. The analyzed sample of 475 firms is the biggest among the studies that analyze performance and employee satisfaction at the firm level. The impact of employee satisfaction over firm performance was assessed. Findings – Overall satisfaction and satisfaction with senior leadership, compensation, and work/life balance, respectively impact firm performance. Research limitations/implications – The ratings come from both employees and ex-employees and the individual characteristics were unknown. Additionally as an internet-based sample there has been a lack of control over the individuals’ response process. Practical implications – Managers have evidence about the importance of their employees’ satisfaction on firm performance, and on how the facets involved on worker satisfaction impact the performance. Social implications – Employer review web sites are increasing their popularity. However, unlike the marketing field with consumers HR area has not taken advantage of this trend. The found results may contribute to highlight the importance of this kind of data. Originality/value – Hitherto there is only one empirical evidence about the positive role of worker satisfaction in objective and financial firm level performance. That was based in best-firms type data. The current study draws in a big sample independent of this kind of rankings. Additionally, the job facet satisfaction conceptualization considered demonstrates the usefulness of this way to understand the employee satisfaction.

Goodwill impairment loss and bond credit rating

2017 ◽  
Vol 25 (1) ◽  
pp. 2-20 ◽  
Author(s):  
Li Sun ◽  
Joseph H. Zhang
Keyword(s):  
Regression Analysis ◽  
Credit Rating ◽  
Credit Ratings ◽  
Negative Relationship ◽  
Least Squares Regression ◽  
Firm Level ◽  
Content Type ◽  
Goodwill Impairment ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this study is to examine the impact of goodwill impairment losses on bond credit ratings. Design/methodology/approach The authors use regression analysis to examine the relationship between goodwill impairment losses and bond credit ratings. Findings The empirical results show a negative relationship between the amount of goodwill impairment losses and bond credit ratings, suggesting that firms with goodwill impairment losses receive lower credit ratings. The authors perform various additional tests, including subsamples in good or bad market time, changes analysis, first time goodwill impairment firms vs subsequent impairment and the two-stage least squares regression analysis to address potential endogeneity issues. The main results persist. Originality/value This paper links and contributes to two streams of literature: goodwill impairment in accounting literature and bond credit ratings in finance literature. Whether a firm’s goodwill impairment losses affect the firm’s bond credit rating remains an interesting question that has not been examined previously. To the best of the authors’ knowledge, this is the first study that directly examines the relationship between goodwill impairment losses and bond ratings at the firm level.

Do corporate bond recovery rates monitored by corporate governance mechanisms?

2016 ◽  
Vol 42 (8) ◽  
pp. 830-848
Author(s):  
Mehdi Mili ◽  
Sami Abid
Keyword(s):  
Corporate Governance ◽  
Generalized Method Of Moments ◽  
Corporate Bonds ◽  
Corporate Bond ◽  
Firm Level ◽  
Recovery Rates ◽  
Content Type ◽  
Country Level ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to examine the relationship between corporate governance (CG) and firms’ bond recovery rates (RRs). The authors hypothesize that governance features impact RRs by controlling agency costs that result from conflicts between bondholders and shareholders. The authors also test the relationship between CG and RRs during the last crisis. Design/methodology/approach – The authors use a generalized method of moments regression model to test the relationship between CG and firms’ bond RRs. The authors employ a direct measure of recoveries rates from Moody’s ultimate recovery database covering the period from 2003 to 2012. Both firm-level CG and country-level variables are used to examine the determinants of corporate bonds RRs. Findings – The results support a significant impact of CG mechanisms on bond RRs mainly during crisis period. The authors find that firms operating with CEO-Duality decrease their bond RRs during financial crisis. This implies wealth transfers from bondholders to shareholders and provides one explanation why some firms operate with weak governance. Originality/value – This paper provides the first direct evidence that corporate bond RRs are directly related to CG mechanisms. The authors combine firm-level CG and country-level variables to examine the determinants of corporate bonds RRs. Earlier studies focussed on financial firm-level data and macro-economic variables. The authors also test the impact of board composition and ownership structure on bond recoveries.

Explorative and exploitative strategies and export performance

2019 ◽  
Vol 22 (1) ◽  
pp. 21-36
Author(s):  
Saba Khalid
Keyword(s):  
High Risk ◽  
Current Literature ◽  
Risk Taking ◽  
Export Performance ◽  
Moderating Effects ◽  
Content Type ◽  
Conceptual Paper ◽  
Exploitation And Exploration ◽  
The Impact ◽  
The Relationship

Purpose This study aims to examine the moderating effects of entrepreneurial orientation (EO) on the relationship of exploitation and exploration strategies with export performance. Drawing on the current literature, this conceptual paper develops a framework that first links the exploitative and explorative strategies with the export performance. Later, propositions are developed to indicate different combinations of individual dimensions of EO as moderating factors to this relationship. Design/methodology/approach This is a conceptual paper which builds on prior conceptual and empirical management research. Findings The preliminary conceptual findings suggest that the exploitative strategy is valuable in the short run after new entry, while explorative strategy is significant in the long run only after new entry. For the moderating effects, a combination of high innovation, high proactiveness and high risk-taking may positively influence both the strategies with export performance. While low innovativeness but high proactiveness and high risk-taking is assumed to positively moderate the exploitative strategy and export performance relationship, a negative moderating role is seen for explorative strategy and export performance. Similarly, high innovativeness but low risk-taking and low proactiveness will negatively moderate the relationship between exploitative/explorative strategy and export performance. Originality/value The current literature warrants research on this topic. For example, literature lacks studies regarding a better understanding of the impact of export market exploitation and exploration on export performance. Further, the impact of EO on performance is well acknowledged in the literature, but their relative influence on the performance of exporting firms remains inconclusive.

What drives the impact of women directors on firm performance? Evidence from intellectual capital efficiency of US listed firms

2019 ◽  
Vol 21 (4) ◽  
pp. 513-530 ◽  
Author(s):  
Faisal Shahzad ◽  
Mushahid Hussain Baig ◽  
Ijaz Ur Rehman ◽  
Fawad Latif ◽  
Bruno S. Sergi
Keyword(s):  
Intellectual Capital ◽  
Gender Diversity ◽  
Performance Measure ◽  
Women Directors ◽  
Firm Level ◽  
Content Type ◽  
Capital Efficiency ◽  
Board Gender Diversity ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to study whether the presence of women directors on the corporate board influences financial performance (FP). To examine the underlying causal mechanism, the authors modeled firm-level intellectual capital efficiency (ICE) in the relationshipbetween board gender diversity (BGD) and FP. Design/methodology/approach Using a sample of 5,879 US firms, a structural model of BGD, IC and FP is conceptualized by accounting for the endogeneity issues and alternative measures of the key variables in the empirical framework. In the model, the percentage of women directors is taken as BGD measures and value-added intellectual coefficient as an IC performance measure, considering governance and corporate performance measures. Findings The authors find a significant impact of BGD on FP. In particular, the results suggest: BGD is linked to IC; the influence of board gender diversity on the FP is indirect; and ICE fully mediates the relationship between BGD and FP. Originality/value To the best of the author’s knowledge, no study has empirically investigated whether the firm-level IC performance explains the influence of BGD on FP. Drawing on the resource-based view and organizational learning theory of the firm, the authors empirically modeled the relationship between BGD and FP through a mediation mechanism of firm-level ICE to fill the void in the literature.

Room for improvement: the impact of bad losses on board quality

2014 ◽  
Vol 15 (3) ◽  
pp. 255-272 ◽  
Author(s):  
Mark B. Mulcahy
Keyword(s):  
Corporate Governance ◽  
Quality Indicators ◽  
Stock Exchange ◽  
Control Sample ◽  
Firm Level ◽  
Content Type ◽  
Research Stream ◽  
The Uk ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to study the relationship between reporting a loss and changes in board quality. Low quality corporate governance is associated with adverse accounting outcomes and is characterised by the lack of non-executive and independent directors on the board. Changes in these board quality indicators in response to the reporting of a loss and conditioned by the severity of the loss are examined. Design/methodology/approach – This study uses four years of board information spanning the report of an initial loss for companies listed on the UK stock exchange. An industry and size matched control sample is used in a difference-in-difference analysis to isolate the impact of the loss from underlying changes in board quality. Findings – Overall the results indicate that more severe initial loss events precipitate improvements in board quality over and above the control sample as well as less severe loss events. Research limitations/implications – Although unambiguous, the reporting of a loss is only one measure of underperformance. Also the board quality indicators used in this study are two from several individual corporate governance variables and amalgamations used in the extent literature. Practical implications – The findings demonstrate that the relationship between corporate governance and performance is endogenous and that the majority of any improvement in board quality actually anticipates the reporting of the loss. Any celebration of improvements in governance need to be tempered by an understanding of the precariousness of the firms at which these improvements are made. Originality/value – This study contributes to a research stream that examines negative shocks, and losses in particular, as an event likely to precipitate firm-level changes in board quality, i.e. firms tend not to make improvements to board quality without the impetus to do so.

The relationship between organizational slack and innovation: revisited

2014 ◽  
Vol 29 (1) ◽  
pp. 26-42 ◽  
Author(s):  
Fariss Terry Mousa ◽  
Jaideep Chowdhury
Keyword(s):  
Fixed Effect ◽  
Publicly Traded ◽  
Firm Level ◽  
Firm Innovation ◽  
Content Type ◽  
Financial Slack ◽  
Level Data ◽  
Economic Downturns ◽  
The Impact ◽  
The Relationship

Purpose – The slack-innovation relationship has interested scholars for years. The authors aim to delve into the impact of financial slack on firm innovation by replicating a classic study arguing that this relationship has an inverse U-shape. Design/methodology/approach – The sample consists of all US firms that were publicly traded between 1993 and 2011. The authors employ the standard econometrics methodology of panel regression with firm-fixed effect and time-fixed effect to estimate the regression equation of firm innovation on financial slack. Findings – The authors find that the relationship between financial slack and R&D investments is similar to that suggested by earlier authors, thus enhancing the generalizability of this important finding in management research. The authors also find that this relationship holds even during economic downturns. Originality/value – The authors replicate Nohria and Gulati's classic study by considering the impact of slack on innovation. The authors also move away from survey data, as used by Nohria and Gulati. The authors utilize actual firm-level data for a large sample of US publicly traded firms from 1993 to 2011, thus enhancing the generalizability of these findings.

Business volatility and employee performance

2018 ◽  
Vol 33 (3) ◽  
pp. 96-119 ◽  
Author(s):  
Wen-Chyuan Chiang ◽  
Li Sun ◽  
Brian R. Walkup
Keyword(s):  
Design Methodology ◽  
Positive Impact ◽  
Employee Performance ◽  
Research Question ◽  
Labor Cost ◽  
Firm Level ◽  
Content Type ◽  
Management Literature ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to examine the impact of business volatility on employee performance. Design/methodology/approach The authors use regression analysis to examine the authors’ research question. Findings The results suggest that business volatility has a significant and positive impact on employee performance. Furthermore, the authors find that the relationship between business volatility and employee performance is stronger for larger firms and firms with higher labor intensity. Originality/value The study links and contributes to two streams of literature: employee/labor cost management from the accounting literature and business volatility from the management literature. Whether business volatility affects employee performance remains an interesting question that has not been definitively answered empirically. To the best of the authors’ knowledge, this is the first empirical study that directly examines the relationship between business volatility and employee performance at the firm level.

scholarly journals Market valuation and corporate investment in India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
K. Dhananjaya
Keyword(s):  
Stock Price ◽  
Investment Decisions ◽  
Corporate Investment ◽  
Market Valuation ◽  
Stock Valuation ◽  
Firm Level ◽  
Content Type ◽  
Market Sentiment ◽  
The Impact ◽  
The Relationship

Purpose This study aims to examine the impact of stock market valuation on corporate investment. Specifically, it attempts to understand the influence of both the fundamental and non-fundamental components of stock price on firms’ investment decisions. Design/methodology/approach The study decomposes the market-to-book (MB) ratio into three components, namely, firm-level mispricing, industry mispricing and growth component to examine the effect of each of these components on corporate investment decisions. Based on the literature review, four testable hypotheses concerning the relationship between market valuation and corporate investment have been generated. These hypotheses have been tested on the panel data of 1,311 Indian Public Limited Manufacturing Firms using a pooled data regression model. Findings The study finds that both the fundamental and non-fundamental components of stock price influence the investment decisions along with the cash flow variable. The market valuation–investment nexus is more pronounced in the case of equity-dependent firms, which shows that stock valuation affects corporate investment predominantly through the equity transaction channel. Further, the positive relationship between industry mispricing and corporate investment demonstrates that the market sentiment also affects firms’ investment decisions. Originality/value The relationship between the different components of market value and corporate investment decisions has not been explored in India. Hence, the present study is unique because it breaks the MB ratio down into growth and mispricing components and examines the impact of each of these components on corporate investment.

scholarly journals Bank concentration and SME financing availability: the impact of promotion of financial inclusion in China

2020 ◽  
Vol 38 (6) ◽  
pp. 1329-1349
Author(s):  
Zhiqiang Lu ◽  
Junjie Wu ◽  
Jia Liu
Keyword(s):  
Positive Impact ◽  
Substitution Effect ◽  
Financial Inclusion ◽  
Firm Level ◽  
Content Type ◽  
Level Data ◽  
The Impact ◽  
The Relationship ◽  
Bank Concentration ◽  
Sme Financing

PurposeThe promotion of financial inclusion can disturb the composition of traditional bank concentration and change the relationship between bank concentration and the availability of small and medium-sized enterprise (SME) financing. This paper concentrates on a less frequently explored area of research by examining the relationships between bank concentration, financial inclusion and SME financing availability respectively, and the interaction between bank concentration and financial inclusion after the implementation of a financial inclusion strategy in China.Design/methodology/approachUsing firm-level data from 1,509 listed SMEs in China from 2007 to 2017 and applying rigorous analyses, we identify how bank concentration affects SME financing availability under the promotion of financial inclusion and also the mechanisms involved.FindingsWe find that bank concentration and financial inclusion respectively have positive impacts on the credit available to listed SMEs, indicating that the promotion of financial inclusion in China has reached a new high watermark. The positive impact of bank concentration is reduced when the level of financial inclusion is high. Conversely, a higher level of financial inclusion favours SME credit availability at only a low degree of bank concentration. Our findings suggest that financial inclusion has a substitution effect on bank concentration and has enabled us to add new interpretations to relevant theories; namely, the Market Power and Information Theories respectively.Originality/valueThis study provides new insights into the relationship between bank concentration and SME finance availability under the promotion of financial inclusion.

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