The contrasting moderating effect of exploration on the relationship between stock options/stock ownership and a firm’s long-term performance

2018 ◽  
Vol 56 (9) ◽  
pp. 1956-1968 ◽  
Author(s):  
Gun Jea Yu ◽  
Joonkyum Lee
Keyword(s):  
Stock Options ◽  
Chief Executive ◽  
Moderating Effect ◽  
Stock Ownership ◽  
Content Type ◽  
And Performance ◽  
Long Term Performance ◽  
Term Performance ◽  
The Relationship

Purpose The purpose of this paper is to investigate the contrasting moderating effect of a firm’s exploration on the relationship between the two types of long-term incentives (stock options/stock ownership) for the chief executive officers and a firm’s long-term performance. Even though the two types of incentives are designed to improve long-term performance, the degrees of impact on long-term performance differ. Based on behavioral agency theory, this study theoretically and empirically examines the role of a firm’s exploration on the above relationship. Design/methodology/approach This study used three archival sources to obtain data on stock options, stock ownership, patents and exploration, financial measures, and others. Based on a sample of 1,963 firms in various industries from 1995 to 2006, this study tested the moderating effect of a firm’s exploration on the relationship between stock options/ownership and a firm’s performance. Findings This study reveals the contrasting moderating effect of a firm’s exploration on the relationship between stock options/ownership and a firm’s long-term performance: a positive moderating effect on the relationship between stock options and performance and a negative moderating effect on the relationship between stock ownership and performance. In addition, empirical evidence was added on the inverted U-shaped relationship between stock ownership and a firm’s long-term performance. Originality/value There is little research on a firm’s internal characteristics that strengthen or weaken the effects of stock options and stock ownership on firm performance. This study demonstrates the differential moderating effects of exploration on the relationship between stock options/stock ownership and long-term performance. Such effects of exploration come from the different risk features of stock options and stock ownership. The key implication is that stock options could be more effective than stock ownership to enhance a firm’s long-term performance when a firm has a strong exploration orientation.

CSR portfolio characteristics and performance outcomes: examining the impacts of CSR portfolio diversity and dynamism

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kyle Turner ◽  
Craig A. Turner ◽  
William H. Heise
Keyword(s):  
Firm Performance ◽  
Dynamic Range ◽  
Performance Outcomes ◽  
Short Term ◽  
Content Type ◽  
Short And Long Term ◽  
Long Term Performance ◽  
Term Performance ◽  
The Relationship

Purpose The purpose of this paper is to introduce and test a portfolio view of a firm’s corporate social responsibility (CSR) activities. Drawing from stakeholder theory and the dynamic capabilities literature, the authors introduce CSR portfolio diversity and dynamism as key portfolio characteristics that have differential impacts across short- and long-term performance contexts. Design/methodology/approach The study draws from the Kinder, Lydenberg and Domini database to examine CSR portfolio diversity and dynamism across seven dimensions of CSR activities. The authors test the direct and indirect relationships between CSR portfolio characteristics and both short- and long-term performance outcomes to assess the opportunities and challenges associated with managing a diverse and dynamic CSR portfolio. Findings The findings suggest that a diverse portfolio of CSR activities positively impacts long-term performance; however, CSR portfolio diversity yields negative performance outcomes in the short-term. The authors also find that CSR portfolio dynamism moderates the relationship between CSR level and firm performance, such that a dynamic portfolio of CSR positively moderates the relationship between a firm’s CSR level and long-term performance; however, it negatively moderates the relationship between CSR level and short-term performance. Originality/value This study integrates insights from the literature that examine the independent effects of individual CSR activities and the broader perspective that assesses the aggregated summation of CSR activities in relation to firm performance. By taking a portfolio perspective, the present study provides a unique integration of these two research streams to examine the performance implications of engaging in a diverse and dynamic range of CSR activities.

scholarly journals THE MODERATING EFFECTS OF SLACK ON THE RELATIONSHIP BETWEEN AMBIDEXTROUS STRATEGY AND PERFORMANCE: EVIDENCE FROM HIGH-TECH FIRMS IN CHINA

2016 ◽  
Vol 17 (5) ◽  
pp. 734-748 ◽  
Author(s):  
Biao LUO ◽  
Changyue LUO ◽  
Jiajia GE ◽  
Dongli ZHANG
Keyword(s):  
Panel Data Analysis ◽  
High Tech ◽  
Moderating Effects ◽  
Slack Resources ◽  
High Technology Firms ◽  
And Performance ◽  
Long Term Performance ◽  
Term Performance ◽  
The Relationship

The purpose of this study is to examine the impacts of ambidexterity of exploration/exploitation on long-term performance and the moderating effects of slack resources. The methodology adopted is panel data analysis of a sample dataset of 125 high technology firms in China. The finding of this study shows that a moderating role of organizational slack between ambidexterity and long-term performance is strongly supported. The research and practical implications of this paper are: (1) Exploration and exploitation can be mutually enhancing instead of being fundamentally contradictory; (2) Slack resources moderate the relationship between ambidexterity and performance. The originality and value of the paper is that it is one of the earliest studies that empirically examine the moderating effects of slack resources on ambidexterity-performance relationship.

Speed, coordination and individualistic behaviors: a pilot NK modeling study to investigate the moderating effects of organizational structure on performance in individual firms

2013 ◽  
Vol 44 (2) ◽  
Author(s):  
Pablo E. Pinto Cornejo ◽  
Jorge G. Montecinos ◽  
Damian Hine ◽  
Peter Knights ◽  
Felipe Valdebenito Pedrero
Keyword(s):  
Organizational Structure ◽  
Organizational Design ◽  
Nk Model ◽  
Low Performance ◽  
And Performance ◽  
The Cost ◽  
Long Term Performance ◽  
Term Performance ◽  
The Relationship

A central concern within the field of organizational design is the study of the relationship between structure, innovation and performance. The basic understanding is that decentralized structures appear best suited to promoting innovation and change. Yet this comes at the cost of efficiency. Conversely, organizations that centralize power in the hands of a few appear well-suited functionally to achieving high levels of efficiency, but at the cost of generating inertia. Taking both forms as polar types at the opposite ends of a continuum, the managerial question of how much of each form is necessary to create a good configuration to perform satisfactorily in the long term remains unknown. In this pilot study, we attempt to answer this question by using an NK model. Our results show that exploration is facilitated by higher levels of decentralization, where a structure that combines centralization and decentralization features delivers the highest long-term performance. We also find that complex organizational forms achieve low performance. This suggests that problems with coordination are costly to manage. Assumptions of game-theory are introduced to quantify the risks of decentralization. Keywords: Organizational structure, NK Model, exploration and exploitation, firm performance.

Help us to help you

2019 ◽  
Vol 35 (10) ◽  
pp. 29-30
Keyword(s):  
Asia Pacific ◽  
Asia Pacific Region ◽  
Content Type ◽  
Pertinent Information ◽  
Short And Long Term ◽  
Long Term Performance ◽  
Performance Gains ◽  
Term Performance ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings Hotels in the Asia-Pacific region have yet to fully utilize social media to promote their CSR initiatives. This means there is huge potential for improved stakeholder engagement, leading to short- and long-term performance gains. Originality The briefing saves busy executives, strategists and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Association of performance with quality initiatives and quality awards: quality initiatives' effect

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Gururaj Upadhyaya ◽  
Subrahmanya Bhat K
Keyword(s):  
Validity And Reliability ◽  
Quality Initiatives ◽  
Content Type ◽  
Quality Awards ◽  
Quality Award ◽  
Research Questions ◽  
Long Term Performance ◽  
Term Performance ◽  
Spearman’S Correlation

PurposeThe purpose of this empirical study intends to explore the contingency effect of the adoption of some specific quality initiatives (QI), on the correlation of some performance measures (PMs) with the “interacting” QI and quality award (QA) models through the continuous improvement (CI) journey of Indian QA winners.Design/methodology/approachA survey questionnaire was administered to the Indian Quality Award winners. Data collected from a survey were followed by validity and reliability analyses of the instrument. Hypotheses were tested using Spearman's correlation test and Fisher's Z-test.FindingsSome specific QI that affected the correlation between PMs and research questions representing the interaction among QI and QA models during different stages of the CI journey of organizations were identified. PMs that correlated with interacting QI and QA models through the above stages of CI journey were also identified.Practical implicationsA preliminary inference on QI to be adopted and the PMs to be focused upon during the different periods of CI journey of Indian organizations was arrived at. This could help practitioners in proper choice of QI and to focus upon “realistic” PM through different stages of the CI journey of organizations.Originality/valueThis study attempts to fill the gap of scarce holistic studies on the long-term performance implications of interacting QI and QA through the CI journey of organizations.

Exhumation and performance of an Antarctic composite barrier system after 4 years exposure

2020 ◽  
Vol 57 (8) ◽  
pp. 1130-1152 ◽  
Author(s):  
R.S. McWatters ◽  
R.K. Rowe ◽  
V. Di Battista ◽  
B. Sfiligoj ◽  
D. Wilkins ◽  
...  
Keyword(s):  
High Density Polyethylene ◽  
Soil Samples ◽  
Composite Liner ◽  
Subgrade Soil ◽  
And Performance ◽  
Long Term Performance ◽  
Term Performance ◽  
The Antarctic ◽  
Coarse Gravel

An Antarctic biopile using a composite liner (high-density polyethylene geomembrane (GMB) over a geosynthetic clay liner (GCL)) was constructed on a coarse granular subgrade to contain hydrocarbon-contaminated soil and leachate. The soil was remediated after 4 years and the biopile was decommissioned. The liner was exhumed to assess the properties and performance of the GMB and GCL. There was no significant change in the GMB index properties. Although cobbles and coarse gravel of the subgrade had left indentations in the GMB, implying tensile strains that could impact long-term performance, there were no holes. There was significant variability in the hydration of the GCL (from 10% to 220%) and in the underlying subgrade soil water content (from 5% to 30%). This reflects the complexity of the subgrade and groundwater flow in the Antarctic environment. The exhumed GCL specimens had low hydraulic conductivity (1 × 10−11 to 7 × 10−11 m/s) at 13 kPa. Soil samples from below the composite liner showed no detectable hydrocarbons and confirmed no migration through the barrier. It is concluded that the composite barrier contained the leachate and biopile soil over the 4 years in service in the extreme Antarctic conditions.

Trade-off between value creation and value appropriation?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cleo Schmitt Silveira ◽  
Marta Olivia Rovedder de Oliveira ◽  
Rodrigo Heldt ◽  
Fernando Bins Luce
Keyword(s):  
Value Creation ◽  
Generalized Method Of Moments ◽  
Impulse Response Functions ◽  
Value Appropriation ◽  
Trade Off ◽  
Content Type ◽  
Short And Long Term ◽  
Long Term Performance ◽  
Term Performance

PurposeManagers face the challenge of balancing resources needed to support value creation and value appropriation. In this study the authors analyze the impacts of innovation investments (i.e. value creation: VC) on advertising expenditures (i.e. value appropriation: VA), and vice versa, and verify the effects of these options on short- and long-term performance.Design/methodology/approachThe effects of these two activities on short- and long-term performance were analyzed observing a panel of 4,090 companies of Standard and Poor's Compustat database from a 40-year period. The authors adopted the panel vector autoregressive (VAR) approach, using the generalized method of moments (GMM).FindingsAlthough there is a trade-off between the strategic emphases on creating and appropriating value, there is also a synergy between them. The results from the impulse response functions support the argument for a virtuous business circle: companies that choose to intensify their investments in R&D tend to increase advertising expenditures, and vice versa.Practical implicationsManagers, rather than having to deal with a trade-off between allocating resources either on VC or VA activities, can capitalize on synergetic benefits resulting from the interaction among them.Originality/valueThe relationship between the VC and VA activities transcends the trade-off imposed by resource restrictions, since the interaction between them creates additional benefits afforded by the synergy of these activities.

scholarly journals The long-run performance of US firms pursuing IPOs in foreign markets

2018 ◽  
Vol 17 (1) ◽  
pp. 58-77 ◽  
Author(s):  
Robert Killins ◽  
Peter V. Egly
Keyword(s):  
Capital Markets ◽  
Abnormal Returns ◽  
Listed Companies ◽  
Foreign Markets ◽  
Content Type ◽  
Long Run ◽  
The Us ◽  
Long Term Performance ◽  
Term Performance

Purpose The purpose of this paper is to investigate the long-run performance of a unique set of US domiciled firms that have bypassed the US capital markets in pursuit of their initial public offering (IPO) overseas. Additionally, this paper then tests the popular underwriter prestige impact and the window of opportunity hypothesis on this unique subset of IPOs. Design/methodology/approach Using a sample of foreign and purely domestic IPOs made by US firms from 2000 to 2011, this study investigates the long-term performance, one-, two- and three-year by using two measures (buy-and-hold return and cumulative abnormal returns) to test the long-run returns of newly listed companies. Finally, the research incorporates both the traditional matching methodology (issue year and size) along with propensity score matching methodology. Findings FIPOs of US companies underperform DIPOs and their matched DIPOs; furthermore, FIPOs underperform the index of the two listing countries they use the most (UK and Canada). Although the choice of a reputable underwriter mitigates underperformance, the choice of listing in a foreign country only may be a result of possible high valuations accorded by foreign investors who buy US-listed companies on the domestic exchange possibly for reducing exchange rate risk and gaining US diversification without incurring additional costs. It is, thus, possible that US companies that undertake Foreign IPOs not only escape potentially higher Security and Exchange Commission regulations and disclosure but also benefit from higher valuations in the foreign markets. Originality/value To the best of the authors’ knowledge, this is the first study to investigate the long-term performance of US firms bypassing the US capital markets in pursuit of their initial equity offering elsewhere. Caglio et al. (2016) investigated why firms decide to pursue such equity raising activity but fail to investigate the firms’ actual performance after issuing equity. This research fills such a gap in the literature and is important for both academics and practitioners. Practitioners can use this information in assessing the quality of such investments in the long-run, and firms can use such information when determining the different options of issuing equity. Further, regulators should be aware of the implications that increased regulations have on capital raising activities in their domestic market.

The long-term performance of cross-border mergers and acquisitions

2015 ◽  
Vol 9 (3) ◽  
pp. 385-400 ◽  
Author(s):  
Sai Lan ◽  
Fan Yang ◽  
Hong Zhu
Keyword(s):  
Mergers And Acquisitions ◽  
Developed Countries ◽  
Performance Outcomes ◽  
Chinese Firms ◽  
Content Type ◽  
Cross Border ◽  
Study Methodology ◽  
Long Term Performance ◽  
Term Performance

Purpose – The purpose of this paper is to examine Chinese firms’ long-term value creation derived from cross-border mergers and acquisitions (CBMAs). Design/methodology/approach – The authors collected a sample of 140 CBMAs conducted by Chinese firms listed in Shenzhen and Shanghai stock markets between 1997 and 2010. Long-horizon event study methodology was used to test hypotheses. Findings – The authors find Chinese firms gain long-term value from CBMAs. In particular, the authors find that Chinese firms tend to gain more value from targets from developed countries, and Chinese state-owned firms are more capable of gaining value from CBMAs than Chinese private firms. Originality/value – Given Chinese firms are increasingly acquiring targets outside of China in recent years, it is still unclear about whether Chinese firms gain value from these very expensive cross-border deals. This is one of the first studies that address the question: What are the long-term performance outcomes of Chinese CBMAs in recent years?

The Long-Term Safety and Performance Analyses of the Surface Disposal Facility for the Belgian Category A Waste at Dessel

2013 ◽  
Author(s):  
Wim Cool ◽  
Elise Vermariën ◽  
William Wacquier ◽  
Janez Perko
Keyword(s):  
Radioactive Waste ◽  
Radiological Criteria ◽  
Disposal Facility ◽  
Safety Function ◽  
License Application ◽  
Performance Analyses ◽  
And Performance ◽  
Long Term Performance ◽  
Term Performance

ONDRAF/NIRAS, the Belgian Agency for Radioactive Waste and Enriched Fissile Materials, and its partners have developed long-term safety and performance analyses in the framework of the license application for a surface disposal facility for low level radioactive waste (category A waste) at Dessel, Belgium. This paper focusses on the methodology of the safety assessments and on key results from the application of this methodology. An overview is given (1) of the performance analyses for the containment safety function of the disposal system and (2) of the radiological impact analyses confirming that radiological impacts are below applicable reference values and constraints and leading to radiological criteria for the waste and the facility. In this discussion, multiple indicators for performance and safety are used to illustrate the multi-faceted nature of long-term performance and safety of the surface disposal. This contributes to the multiple lines of reasoning for confidence building that a positive decision to proceed to the next stage of construction is justified.

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