Corporate entrepreneurship and market performance

2017 ◽  
Vol 40 (3) ◽  
pp. 352-367 ◽  
Author(s):  
Vivien E. Jancenelle ◽  
Susan Storrud-Barnes ◽  
Rajshekhar (Raj) G. Javalgi
Keyword(s):  
Direct Effect ◽  
Risk Taking ◽  
Firm Value ◽  
Market Performance ◽  
Corporate Entrepreneurship ◽  
Conference Calls ◽  
Content Type ◽  
Competitive Aggressiveness ◽  
The Impact ◽  
Positive Effect

Purpose The purpose of this paper is to investigate the effects of a firm’s entrepreneurial proclivity on market performance for large, publicly traded US firms. This study draws upon the five-dimensional view of corporate entrepreneurship (CE) and develops hypotheses aimed at understanding the effects of direct effect of CE cues of proactiveness, autonomy, innovativeness, competitive aggressiveness and risk-taking on stock performance during earnings conference calls. Design/methodology/approach The entrepreneurial orientation of 339 firm post-earnings announcement conference calls is analyzed through a content analysis of transcripts, and the impact of CE cues on stock price is measured using event-study methodology. Findings The results suggest that the cueing the CE dimensions of innovativeness, risk-taking and especially autonomy have a positive effect on market performance during conference calls, while competitive aggressiveness has a negative effect. No effect was found for proactiveness. Research limitations/implications The effect of entrepreneurial proclivity on firm value is not uniform. Not all dimensions of CE have a positive effect on market performance at a corporate level, and measuring each dimension of CE separately may be a valuable approach for future research. Practical implications Firms may create more value when they cue specific entrepreneurial attributes, and cueing competitive aggressiveness may not be desirable. Originality/value This study fills a gap in the literature by measuring the direct effect of CE cues on market performance through an innovative research design which relies on computer-aided text analysis.

Moral foundations and financial performance: the effect of moral cues during times of earnings uncertainty

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vivien E. Jancenelle
Keyword(s):  
Firm Value ◽  
Market Performance ◽  
Computer Assisted ◽  
Moral Foundations ◽  
Conference Calls ◽  
Data Set ◽  
Content Type ◽  
The Face ◽  
Study Methodology ◽  
Earnings Uncertainty

Purpose This paper aims to investigate whether cues of morality can mitigate stock sell-offs in the face of earnings uncertainty prior to earnings conference calls and draws on moral foundations theory to study the effect of universal moral cues (harm/care and fairness/reciprocity rhetoric) and primarily conservative moral cues (ingroup/loyalty, authority/respect and purity/sanctity rhetoric) on market performance. Design/methodology/approach The study relies on a longitudinal data set of 1,920 firm-quarter observations corresponding to calls held by firms listed on the S&P 500 in 2015 and relies on computer-assisted-text-analysis and event-study methodology to test hypotheses. Findings The results suggest that cues of universal moral foundations have a mitigating effect on stock sell-offs and are able to create firm value; while cues primarily conservative moral foundations are not found to have an effect on market performance. Originality/value This investigation highlights why earnings conference calls may serve as a valuable tool for communicating a firm’s moral inclination and why universal morality may appeal to a wider range of shareholders than primarily conservative morality.

scholarly journals The Impact of Corporate Entrepreneurship on the Performance of Jordanian Telecom Corporates

2021 ◽  
Vol 24 (1) ◽  
pp. 31-60
Author(s):  
Mohammad Suleiman Awwad ◽  
Abdullah Aref Abu-Karaki
Keyword(s):  
Risk Taking ◽  
Corporate Entrepreneurship ◽  
Inferential Statistics ◽  
Improve Performance ◽  
Statistical Program ◽  
Competitive Aggressiveness ◽  
Telecom Sector ◽  
The Impact

The Telecom sector in Jordan is highly competitive in a way that affects the performance of firms working in this sector, many solutions were provided to enhance performance, but corporate entrepreneurship as a solution to significantly improve performance still not have fully adopted, that is why this research was carried to highlight the importance of such concept to improve performance. This research was aimed at determining the impact of corporate entrepreneurship dimensions (innovation, risk-taking, proactiveness, competitive aggressiveness, and autonomy) on the performance of Jordanian telecom corporates in Jordan. Data were collected from 39 telecom corporates in Jordan. The questionnaires entail assessing the degree of corporate entrepreneurship in relation to the performance of telecom corporates in Jordan. SmartPLS 2.0 Statistical program was used to conduct descriptive and inferential statistics. The findings of the research indicated that corporate entrepreneurship dimensions (innovation, risk-taking, proactiveness, and competitive aggressiveness) positively affect the performance of Jordanian telecom corporates except for the autonomy dimension.

scholarly journals Risk committee, corporate risk-taking and firm value

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md. Borhan Uddin Bhuiyan ◽  
Muhammad A. Cheema ◽  
Yimei Man
Keyword(s):  
Risk Taking ◽  
Firm Value ◽  
Firm Risk ◽  
Content Type ◽  
Potential Risks ◽  
Risk Committee ◽  
Corporate Risk ◽  
The Impact ◽  
Practical Implications

PurposeThe authors empirically examine the impact of the stand-alone risk committee on corporate risk-taking and firm value.Design/methodology/approachThe authors argue that the existence of a stand-alone risk committee enhances the quality of corporate governance, which reduces corporate risk-taking and strengthens the firm value that might improve investor protection.FindingsThe authors find corporate risk-taking decline significantly for firms that have a stand-alone risk committee compared with firms that have a joint audit and risk committee. The authors also find that the presence of a stand-alone risk committee is positively associated with firm value.Practical implicationsThe evidence is consistent with the proposition that firms with a stand-alone risk committee can effectively evaluate potential risks and implement a proper risk management system.Originality/valueThis is the first paper that investigates the association between the existence of a stand-alone risk committee and firm risk-taking in a multi-industry setting. Also, our research extends the association between a stand-alone risk committee and firm value.

Night markets: entrepreneurship and achieving competitive advantage

2016 ◽  
Vol 28 (11) ◽  
pp. 2374-2398 ◽  
Author(s):  
Chih-Hsing Sam Liu ◽  
Yen-Po Fang
Keyword(s):  
Competitive Advantage ◽  
Risk Taking ◽  
Structural Equation ◽  
Structural Equation Models ◽  
Competitive Advantages ◽  
Content Type ◽  
Mediating Role ◽  
Competitive Aggressiveness ◽  
Positive Effect ◽  
Night Markets

Purpose This paper aims to propose a new model and examine how night market entrepreneurs have achieved a competitive advantage in strongly competitive markets. Design/methodology/approach Two statistics methods, multiple regression analysis and structural equation models (SEM), were used to test the hypotheses for a sample of 346 vendor cases. Findings The results indicate that competitive aggressiveness and being proactive are positively related to risk-taking among night market vendors, which, in turn, has a positive effect on innovativeness. Further, the findings also indicate that risk-taking positively influences innovativeness and, in a mediating role, also affects competitive advantages through innovativeness. Practical implications Results of this study suggest that if night market entrepreneurs demonstrate innovativeness, positively develop new products and new services and attract customers to buy them, then they will have unique and attractiveness in the night markets, thus giving themselves relative competitive advantage. Originality/value This research is the first comprehensive examination of entrepreneurship among night market entrepreneurs to study the competitive advantages of different facets, which may provide a benchmark for future studies.

Impact of relatedness, uncertainty and slack on corporate entrepreneurship decisions

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Robert Garrett ◽  
Shaunn Mattingly ◽  
Jeff Hornsby ◽  
Alireza Aghaey
Keyword(s):  
Decision Making ◽  
Hierarchical Linear Modeling ◽  
Cognitive Strategies ◽  
Corporate Entrepreneurship ◽  
New Venture ◽  
Organizational Level ◽  
Linear Modeling ◽  
Slack Resources ◽  
Content Type ◽  
Positive Effect

PurposeThe purpose of this study is to evaluate the effect of opportunity relatedness and uncertainty on the decision of a corporate entrepreneur to pursue a venturing opportunity.Design/methodology/approachThe study uses a conjoint experimental design to reveal the structure of respondents' decision policies. Data were gathered from 47 useable replies from corporate entrepreneurs and were analyzed with hierarchical linear modeling (HLM).FindingsResults show that product relatedness, market relatedness, perceived certainty about expected outcomes and slack resources all have a positive effect on the willingness of a corporate entrepreneur to pursue a new venture idea. Moreover, slack was found to diminish the positive effect of product relatedness on the likelihood to pursue a venturing opportunity.Practical implicationsBy providing a better understanding of decision-making schemas of corporate entrepreneurs, the findings of this study help improve the practice of entrepreneurship at the organizational level. In order to make more accurate opportunity assessments, corporate entrepreneurs need to be aware of their cognitive strategies and need to factor in the salient criteria affecting such assessments.Originality/valueThis paper adds to the limited understanding of corporate-level decision-making with regard to pursuing venturing opportunities. More specifically, the paper adds new insights regarding how relatedness and uncertainty affect new venture opportunity assessments in the presence (or lack thereof) of slack resources.

Social capital and national innovation system: a cross-country analysis

2014 ◽  
Vol 21 (4) ◽  
pp. 453-475 ◽  
Author(s):  
Sepehr Ghazinoory ◽  
Ali Bitaab ◽  
Ardeshir Lohrasbi
Keyword(s):  
Social Capital ◽  
National Level ◽  
Innovation System ◽  
Negative Effects ◽  
Content Type ◽  
Research Findings ◽  
Different Dimensions ◽  
The Impact ◽  
Positive Effect

Purpose – In the last two decades, researchers have paid much attention to the role of cultural values on economic and social development. In particular, the crucial role of different aspects of culture on the development of innovation has been stressed in the literature. Consequently, it is vital to understand how social capital, as a core cultural value, affects the innovation process and the innovative performance at the national level. However, to date, the impact of different dimensions of social capital and innovation has not been properly portrayed or explained. Thus, the purpose of this paper is to investigate the influence of four different dimensions of social capital (institutional and interpersonal, associational life and norms) on two of the main functions of national innovation system (NIS) (entrepreneurship and knowledge creation) based on over 50,000 observations in 34 countries. Design/methodology/approach – In this regard, national-level data from the World Values Survey database was employed to quantify social capital. Entrepreneurship is, in turn, assumed to consist of three sub-indexes and 14 indicators based on the Global Entrepreneurship Index. Knowledge creation is also measured through US Patent Office applications. Also, exploratory factor analysis and structural equation modeling approach were used to build the measurement model and investigate the impact that each factor of social capital had on entrepreneurship and knowledge application, respectively. Measurement and structural models were built and their reliability and validity were tested using various fit indices. Research findings suggest the strong positive effect of institutional trust and networking on entrepreneurship. Also, interpersonal trust and networks were shown to have high influence on knowledge development at the national level. Norms appear to have naïve to medium negative effects on both functions. Findings – Research findings suggest the strong positive effect of institutional trust and networking on entrepreneurship. Also, interpersonal trust and networks were shown to have high influence on knowledge development at the national level. Norms appear to have naïve to medium negative effects on both functions. Originality/value – However, to date, the impact of different dimensions of social capital and innovation has not been properly portrayed or explained.

Should Fast-Food Franchisees Pursue Entrepreneurial Orientation?

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Ehsan Asgharian ◽  
Misagh Tasavori ◽  
Jim Andersén
Keyword(s):  
Firm Performance ◽  
Significant Role ◽  
Risk Taking ◽  
Entrepreneurial Orientation ◽  
Fast Food ◽  
Business Systems ◽  
Unidimensional Construct ◽  
Different Dimensions ◽  
Competitive Aggressiveness ◽  
The Impact

Abstract Although it is widely accepted that entrepreneurial orientation (EO) improves firm performance, scholars have advised that particular attention should be paid to the context. In this research, we investigate a less explored context of franchising where business systems and procedures are usually dictated to franchisees by franchisors. Therefore, whether a franchisor should allow franchisees to pursue EO (innovativeness, proactiveness, risk-taking, competitive aggressiveness, and autonomy) is not clear. In the context of franchising, the majority of prior studies have mainly focused on the employment of EO as a unidimensional construct and at the franchisor level. In this research, we take a bottom-up perspective and evaluate the impact of different dimensions of EO on franchisees’ performance. Our analysis of a multi-group of 183 restaurant franchisees located in Sweden and Iran reveals that only the pursuit of proactiveness and competitive aggressiveness improves a franchisee’s performance and other dimensions do not play a significant role in improving performance in this context.

Epidemics and Chinese firms' stock returns: is COVID-19 different?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Quang Thi Thieu Nguyen ◽  
Dao Le Trang Anh ◽  
Christopher Gan
Keyword(s):  
Stock Returns ◽  
Negative Impact ◽  
Stock Exchange ◽  
Market Performance ◽  
Disease Outbreaks ◽  
Stock Exchanges ◽  
Content Type ◽  
Event Study Method ◽  
Economic Shock ◽  
The Impact

PurposeThis study investigates the Chinese stocks' returns during different epidemic periods to assess their effects on firms' market performance.Design/methodology/approachThe study employs an event study method on more than 3,000 firms listed on Shanghai and Shenzhen stock exchanges during periods of SARS, H5N1, H7N9 and COVID-19FindingsEpidemics' effect on firms' stock returns is persistent up to 10 days after the event dates. Although the impact varies with types and development of the disease, most firms experience a negative impact of the epidemics. Among the epidemics, COVID-19 has the greatest impact, especially when it grows into a pandemic. The epidemics' impact is uneven across industries. In addition, B-shares and stocks listed on Shanghai Stock Exchange are more negatively influenced by the epidemic than A-shares and those listed on Shenzhen Stock Exchange.Research limitations/implicationsThe results of the study contribute to the limited literature on the effects of disease outbreaks as an economic shock on firm market performance. Given the possibility of other epidemics in the future, the study provides guidance for investors in designing an appropriate investing strategy to cope with the epidemic shocks to the market.Originality/valueThe research is novel in the way it compares and assesses the economic impact of different epidemics on firms and considers their impact at different development stages.

The effect of intangible assets on sustainable growth and firm value – Evidence on intellectual capital investment in companies listed on Bucharest Stock Exchange

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Catalin Ionita ◽  
Elena Dinu
Keyword(s):  
Growth Rate ◽  
Intellectual Capital ◽  
Firm Value ◽  
Intangible Assets ◽  
Stock Exchange ◽  
Listed Companies ◽  
Sustainable Growth ◽  
Content Type ◽  
Sustainable Growth Rate ◽  
The Impact

PurposeThe present study investigates the connection between company investments in intellectual capital (IC) and how they translate into financial value. The aim is to test the impact of intangible assets on the firm value and its sustainable growth.Design/methodology/approachThe research employs computation models to determine the sustainable growth rate (SGR) and the firm value (FV), and by using the ordinary least squares (OLS) model through a linear regression assesses the relationship between the dependent variables and expenditures on intangibles like R&D, IT programs and patents. A sample of 42 companies has been selected out of the 78 listed at Bucharest Stock Exchange (BSE), based on the appropriateness of the information disclosed in the financial reports for the period 2016–2019.FindingsThe results show that intangibles classified as innovative competences (R&D and Patents) do not have a positive impact on SGR and FV in listed companies from Romania. Moreover, R&D has a negative and significant effect on FV, while IT Programs have a positive and significant impact on FV, but not on the SGR. Variables categorised as economic competencies (Brands, Shares held in associates and jointly controlled entities) and firm structure-specific variables (Leverage, Firm Performance) seem to have a significant effect on SGR and FV. Shares held in associates and jointly controlled entities is the variable that can have the biggest impact when it comes to FV for companies listed at BSE.Research limitations/implicationsDue to non-disclosure of specific information by some companies, or lack of investments in intangibles the sample had to be reduced and does not cover all listed companies.Practical implicationsCompanies listed on the Regulated Market from the Bucharest Stock Exchange should maintain their scale of liabilities at a reasonable level when financing intangible assets in order to ensure corporate long-term and sustainable development. Also, these companies should maintain awareness about the importance of intangible assets and invest more in specific sub-components, in order to sustain competitive advantage. Recognizing the roles of intangibles, managers need to develop strategies to invest in profitable intangibles by reasonably allocating their limited resources, in order to achieve sustainable growth and increase company success.Originality/valueStudies concerning the relation between investments in intangibles and sustainable growth rate and firm value of listed Romanian companies are very scarce. This paper reveals new research, never before undertaken, concerning expenditures on intangibles by Romanian companies and the valuation of such investments on Bucharest Stock Exchange.

Shareholder risk-taking incentives in the presence of contingent capital

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahmoud Fatouh ◽  
Ayowande A. McCunn
Keyword(s):  
Risk Taking ◽  
Banking System ◽  
Capital Requirements ◽  
Content Type ◽  
Basic Model ◽  
Conversion Rates ◽  
A Minor ◽  
The Impact ◽  
Practical Implications

Purpose This paper aims to present a model of shareholders’ willingness to exert effort to reduce the likelihood of bank distress and the implications of the presence of contingent convertible (CoCo) bonds in the liabilities structure of a bank. Design/methodology/approach This study presents a basic model about the moral hazard surrounding shareholders willingness to exert effort that increases the likelihood of a bank’s success. This study uses a one-shot game and so do not capture the effects of repeated interactions. Findings Consistent with the existing literature, this study shows that the direction of the wealth transfer at the conversion of CoCo bonds determines their impact on shareholder risk-taking incentives. This study also finds that “anytime” CoCos (CoCo bonds trigger-able anytime at the discretion of managers) have a minor advantage over regular CoCo bonds, and that quality of capital requirements can reduce the risk-taking incentives of shareholders. Practical implications This study argues that shareholders can also use manager-specific CoCo bonds to reduce the riskiness of the bank activities. The issuance of such bonds can increase the resilience of individual banks and the whole banking system. Regulators can use restrictions on conversion rates and/or requirements on the quality of capital to address the impact of CoCo bonds issuance on risk-taking incentives. Originality/value To model the risk-taking incentives, authors generally modify the asset processes to introduce components that reflect asymmetric information between CoCo holders and shareholders and/or managers. This paper follows a simpler method similar to that of Holmström and Tirole (1998).

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