CEO dominance and firm innovation effort

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nicolette Chatelier Prugsamatz
Keyword(s):  
Least Squares ◽  
Negative Relationship ◽  
Chief Executive ◽  
Ordinary Least Squares ◽  
Firm Innovation ◽  
Content Type ◽  
Ceo Incentives ◽  
Innovation Projects ◽  
The Right

PurposeThe purpose of this paper is to investigate whether innovation effort is lower for firms exhibiting signs of higher chief executive officer (CEO) dominance and whether such CEOs can be incentivized to pursue risky ventures such as innovation projects in line with shareholder's interests that are geared toward the long-term growth of the firm.Design/methodology/approachThe paper utilizes panel data of US publicly listed companies (2007–2016) to address the influence of CEO dominance on firm innovation effort and the moderating effects of incentives in this relationship through ordinary least squares (OLS) estimations. A two-stage least squares (2SLS) technique is also employed to address possible endogeneity. As a robustness check, further analysis is conducted utilizing an alternative proxy for CEO incentive as well as Tobit analysis (with panel-level random effects).FindingsResults from both OLS and Tobit estimations offer two key findings. First, there is a significantly negative relationship between CEO pay slice and firm research and development (R&D) intensity. Second, the interaction effect of CEO incentives and CEO dominance is significant and positive.Research limitations/implicationsWhen provided with the right incentives, such as those that reward long-term performance, dominant CEOs can be incentivized to go after risky ventures like innovation projects that are crucial to promoting the long-term growth of the firm.Originality/valueThis paper utilizes R&D instead of patent outputs as proxies for innovation where the former enables studying R&D efforts for more recent periods compared to prior studies that utilize patent data.

The impact of gender inequality in education and employment on economic performance in Turkey: evidence from a cointegration approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ömer Esen ◽  
Gamze Yıldız Seren
Keyword(s):  
Least Squares ◽  
Economic Performance ◽  
Ordinary Least Squares ◽  
Estimation Methods ◽  
Content Type ◽  
Cointegration Tests ◽  
Johansen Cointegration ◽  
Education And Employment ◽  
The Impact

PurposeThis study aims to empirically examine the impact of gender-based inequalities in both education and employment on economic performance using the dataset of Turkey for the period 1975–2018.Design/methodology/approachThis study employs Johansen cointegration tests to analyze the existence of a long-term relation among variables. Furthermore, dynamic ordinary least squares (DOLS) and fully modified ordinary least squares (FMOLS) estimation methods are performed to determine the long-run coefficients.FindingsThe findings from the Johansen cointegration analysis confirm that there is a long-term cointegration relation between variables. Moreover, DOLS and FMOLS results reveal that improvements in gender equality in both education and employment have a strong and significant impact on real gross domestic product (GDP) per capita in the long term.Originality/valueThe authors expect that this study will make remarkable contributions to the future academic studies and policy implementation, as it examines the relation among the variables by including the school life expectancy from primary to tertiary based on the gender parity index (GPI), the gross enrollment ratio from primary to tertiary based on GPI and the ratio of female to male labor force participation (FMLFP) rate.

Do tournament incentives motivate chief executive officers to be socially responsible?

2020 ◽  
Vol 35 (5) ◽  
pp. 597-619
Author(s):  
Shahid Ali ◽  
Junrui Zhang ◽  
Muhammad Usman ◽  
Muhammad Kaleem Khan ◽  
Farman Ullah Khan ◽  
...  
Keyword(s):  
Social Responsibility ◽  
Least Squares ◽  
Chief Executive Officers ◽  
Fixed Effects ◽  
Chief Executive ◽  
Ordinary Least Squares ◽  
Socially Responsible ◽  
Content Type ◽  
Tournament Theory ◽  
Executive Officers

Purpose This study aims to investigate the question concerning whether tournament incentives motivate chief executive officers (CEOs) to be socially responsible. Design/methodology/approach Data from all A-share Chinese companies listed on the Shanghai and Shenzhen stock exchanges for the period from 2010 to 2015 are used. To draw inferences from the data, ordinary least squares (OLS) regression and cluster OLS are used as a baseline methodology. To control for the possible issue of endogeneity, firm-fixed-effects regression, two-stage least squares regression and propensity score matching are used. Findings A reliable evidence is found that tournament incentives motivate CEOs to be more socially responsible. Additional analysis reveals that the positive effect of CEO tournament incentives on corporate social responsibility performance (CSRP) is more pronounced in state-owned firms than it is in non-state-owned firms. The study’s findings are consistent with tournament theory and the conventional wisdom hypothesis, which proposes that better incentives lead to competitiveness, which improves financial and social performance. Practical implications The study’s findings have implications for companies and regulators who wish to enhance CSRP by giving tournament incentives to top managers. Investment in social responsibility may reduce the conflict between executives and employees and improve the corporate culture. Originality/value This study contributes to the existing literature by providing the first evidence that CEOs’ tournament incentives play a vital role in CSRP. The study’s findings contribute to tournament theory.

Does human capital matter for reduction in energy consumption in India?

2019 ◽  
Vol 13 (2) ◽  
pp. 359-376 ◽  
Author(s):  
Vaseem Akram ◽  
Bhushan Praveen Jangam ◽  
Badri Narayan Rath
Keyword(s):  
Human Capital ◽  
Energy Consumption ◽  
Energy Conservation ◽  
Least Squares ◽  
Negative Relationship ◽  
Ordinary Least Squares ◽  
Annual Data ◽  
Content Type ◽  
Long Run ◽  
Short Run

Purpose This paper aims to investigate whether improvement in human capital can foster energy conservation by reducing the energy consumption in India using annual data from 1980 to 2014. Further, this study examines the relationship between human capital and various forms of energy consumption such as electricity, coal, natural gas, hydrocarbon gas and petroleum consumption. Design/methodology/approach To attain the objective, the study investigates this relation through the auto-regressive distributed lag model (ARDL) technique to find a long-run and short-run relationship. Second, to check the robustness of the results, the authors use alternative econometric methods such as dynamic ordinary least squares and fully modified dynamic ordinary least squares. Findings The results reveal a negative relationship between human capital and energy consumption, which implies that improvement in human capital lowers the energy consumption and various forms energy consumption, except for petroleum consumption. The results derived from ARDL show that there exists a long-run and short-run association between human capital and energy consumption. The results are consistent across the econometric techniques. Practical implications Because G20 countries including India aim at reducing carbon emission to a certain level, this study provides an insight that by emphasizing on human capital, India can reduce energy consumption, which would foster energy conservation. Originality/value To the best of the authors’ knowledge, this the first study in India which attempts to examine the effect of human capital on energy consumption and its various forms.

CEO pay slice and acquisitions in Australia: the role of tournament incentives

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hoa Luong ◽  
Abeyratna Gunasekarage ◽  
Syed Shams
Keyword(s):  
Least Squares ◽  
Abnormal Return ◽  
Chief Executive ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Content Type ◽  
Governance Environment ◽  
Long Run ◽  
Ceo Pay ◽  
Acquisition Announcements

PurposeThis paper investigates the influence of tournament incentives, measured by Chief Executive Officer (CEO) pay slice (CPS), on the acquisition decisions of Australian firms.Design/methodology/approachThis study applies ordinary least squares regression analyses to a sample of 1,429 acquisition observations announced by 986 unique Australian firms spanning the 2001–2015 period. Event study methodology was employed to capture the market reaction to acquisition announcements. Multinomial logit models, a two-stage least squares instrumental variable (IV) approach and propensity score matching (PSM) technique were performed for robustness and endogeneity correction purposes.FindingsThe results suggest that CPS has a positive and significant relationship with the announcement period abnormal return realised by acquirers, implying that executives are motivated to exert best efforts and support the CEO in making value-creating acquisitions. Further analyses reveal that management teams of high CPS firms demonstrate efficiencies in executing acquisitions. The positive relationship between the CPS and abnormal return is more pronounced in acquisitions of private targets, domestic targets and bidders with high-quality CEOs. These acquisitions make a significant contribution to the long-run performance of the firm, which provides support for the effort inducement hypothesis.Practical implicationsThe study's empirical evidence implies that the strong governance environment in Australia and a highly monitored acquisition market and compensation contracts motivates executives to exert their efforts to make value-enhancing acquisitions.Originality/valueThis paper appears to be the first investigation that makes a link between CPS in different components (i.e. short-term, long-term and total pay) as proxy for tournament incentives and the outcomes of both public and non-public acquisitions in the Australian setting.

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).

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 ascension of executives' tenure, corporate risk-taking and corporate performance: evidence from Malaysia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Osama F. Atayah ◽  
Khakan Najaf ◽  
Ravichandran K. Subramaniam ◽  
Phaik Nie Chin
Keyword(s):  
Risk Taking ◽  
Corporate Performance ◽  
Stock Exchange ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Ordinary Least Squares ◽  
Executive Management ◽  
Content Type ◽  
Top Executives ◽  
Corporate Risk

PurposeThis study aims to investigate the implication of top executives’ number of years of experience (tenure) on corporate risk-taking behaviour and corporate performance in Malaysian corporations.Design/methodology/approachTo test the hypothesis efficiently, the authors have extracted the data from Bloomberg for 788 listed companies of the Malaysian Stock Exchange. The methodology entails ordinary least squares regressions, quantile regression and dynamic system generalized method of moments model.FindingsFirst, the authors show that executive management tenure has a significant negative relationship with corporate risk-taking. It means that the long-tenured executives tend to undertake less risky strategies and decisions. Second, this study reveals that the longer executive management tenure has a positive relationship with corporate performance. Third, the moderating effect of corporate risk-taking with executive tenure (Tenure dummy*Risk) has a negative relationship with the corporate performance by 1%.Practical implicationsIt implies that the appointment of experienced executive management contributes towards corporate performance directly. However, experienced management trends take less risk, which eventually results in mitigating the corporate performance. On that basis, the findings are significant in highlighting the usefulness of executive leadership term and offers insights to academics, practitioners and policymakers.Originality/valueThis paper is novel since it is unique in evaluating the executive tenure and the preferences to handle risk strategies and how that impact the firm performance.

Labor lawsuits and debt maturity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Omer Unsal
Keyword(s):  
Chief Executive ◽  
Debt Maturity ◽  
Employee Relations ◽  
Short Term ◽  
Content Type ◽  
Negative Effect ◽  
Debt Market ◽  
Legal Fees

Purpose This paper aims to investigate how firms’ relationships with employees define their debt maturity. The authors empirically test the role of employee litigations in influencing firms’ choice of short-term versus long-term debt. The authors study employee relations by analyzing the importance of the workplace environment on capital structure. Design/methodology/approach The author’s test hypotheses using a sample of US publicly traded firms between 2000 and 2017, including 3,056 unique firms with 4,256 unique chief executive officer, adopting the fixed effect panel model. Findings The authors document that employee litigations have a significant negative effect on the use of short-term debt and a significant positive affect on long-term debt. Employee litigations, along with legal fees, outcomes and charging parties, matter the most in explaining debt maturity. In addition, frequently sued firms abandon the short-term debt market and use less shareholders’ equity to finance their operations while relying more on the longer debt market. Originality/value To the best of the authors’ knowledge, this is the first study to examine the role of employee mistreatment in debt maturity choice. The study extends the lawsuit and finance literature by examining unique, hand-collected data sets of employee lawsuits, allegations, violations, settlements, charging parties, case outcomes and case durations.

scholarly journals The effect of creative corporate culture and intangibility on the performance of foreign firms traded on the NYSE

2018 ◽  
Vol 15 (4) ◽  
pp. 356-372 ◽  
Author(s):  
Marcia Martins Mendes De Luca ◽  
Paulo Henrique Nobre Parente ◽  
Emanoel Mamede Sousa Silva ◽  
Ravena Rodrigues Sousa
Keyword(s):  
New York ◽  
Least Squares ◽  
Corporate Culture ◽  
Corporate Performance ◽  
Stock Exchange ◽  
Generalized Least Squares ◽  
Ordinary Least Squares ◽  
Foreign Firms ◽  
Content Type ◽  
Negative Effect

Purpose Following the tenets of resource-based view, the present study aims to investigate the effect of creative corporate culture according to the competing values framework model at the level of corporate intangibility and its respective repercussions on performance. Design/methodology/approach The sample included 117 non-USA foreign firms traded on the New York Stock Exchange (NYSE), which issued annual financial reports between 2009 and 2014 using the 20-F form. To meet the study objectives, in addition to the descriptive and comparative analyses, the authors performed regression analyses with panel data, estimating generalized least-squares, two-stage least-squares and ordinary least-squares. Findings Creative culture had a negative effect on the level of intangibility and corporate performance, while the level of intangibility did not appear to influence corporate performance. When combined, creative culture and intangibility had a potentially negative effect on corporate results. In conclusion, creative corporate culture had a negative effect on performance, even in firms with higher levels of intangibility, characterized by elements like experimentation and innovation. Originality/value Although the study hypotheses were eventually rejected, the analyses are relevant to both the academic setting and the market because of the organizational and institutional aspects evaluated, especially in relation to intangibility and creative culture and in view of the unique cross-cultural approach adopted. Within the corporate setting, the study provides a spectrum of stakeholders with tools to identify the profile of foreign firms traded on the NYSE.

scholarly journals The Contribution of Foreign Direct Investment (FDI) To Domestic Employment Levels in South Africa: A Vector Autoregressive Approach

2019 ◽  
Vol 11 (1(J)) ◽  
pp. 110-121
Author(s):  
Bongumusa Prince Makhoba, ◽  
Irrshad Kaseeram
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Least Squares ◽  
South African ◽  
Empirical Analysis ◽  
Negative Relationship ◽  
Ordinary Least Squares ◽  
Series Data ◽  
The South ◽  
Vector Autoregressive

Several empirical works have yielded mixed and controversial results with regard to the effects of FDI on employment and economic growth. The primary focus of this study is to investigate the contribution of FDI to domestic employment levels in the context of the South African economy. The analyses of the study were carried out using the annual time series data from 1980 to 2015. The macroeconomic variables employed in the empirical investigation include employment, FDI, GDP, inflation, trade openness and unit labour costs. The study used secondary data from the South African Reserve Bank and Statistics South Africa database. The study estimated a Vector Autoregressive/ Vector Error Correction Mechanism (VAR/VECM) approach to conduct empirical analysis. However, the study also employed single equation estimation techniques, including the Ordinary Least Squares (OLS), Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS) and Canonical Cointegrating Regression (CCR) models as supporting tools to verify the VAR/VECM results. This study provides strong evidence of a significant negative relationship between FDI and employment levels in the South African economy. Empirical analysis of the study suggests that the effect of economic growth on employment is highly positive and significant in South Africa’s economy. The study recommends that policymakers ought to invest more in productive sectors that aim to promote economic growth and development to boost employment opportunities in South Africa.

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