The impact of TMT functional background on firm performance

2015 ◽  
Vol 6 (3) ◽  
pp. 281-311 ◽  
Author(s):  
Xueli Wang ◽  
Lin Ma ◽  
Yanli Wang
Keyword(s):  
Corporate Performance ◽  
Stock Exchange ◽  
Social Categorization ◽  
Innovation Performance ◽  
Short Term ◽  
Content Type ◽  
Categorization Theory ◽  
The Social ◽  
Term Performance

Purpose – The purpose of this paper is to discuss the influence of different aspects of top management team (TMT) functional background on short-term performance, long-term performance, innovation performance and oversea performance separately. This research aims to verify whether the social categorization theory and information and decision-making theory are applicable in listed companies of China’s information technology (IT) industry so as to provide key theoretical references for TMT enhancement ad corporate performance improvement. Design/methodology/approach – This paper takes A-share listed companies in Shanghai Stock Exchange and Shenzhen Stock Exchange as its study subjects, and it chooses the data from 2004 to 2010 in all of the 105 companies in IT industry in terms of the classification of Wind Database. The stepwise multiple regressions were run utilizing the regression program in Statistical Product and Service Solutions (SPSS). Findings – The research results show that the social categorization theory can better explain TMT’s influence on corporate performance. TMT functional heterogeneity does not contribute to improving corporate performance and shows significant negative influence on short-term performance and innovation performance in particular. Among the three basic functional backgrounds, TMTs dominated by “throughput” backgrounds show significant positive influence on short-term performance, long-term performance, innovation performance and overseas performance, and the influence turns out to be the largest among these three backgrounds. In terms of the three special professional experiences, top executives with overseas backgrounds have significant positive influence on all of short-term, long-term, innovation and overseas performances. Externally hired executives, however, would impede corporate innovation development, while those with government background would increase corporate overseas performance. Originality/value – This paper analyzes the relationship between TMT functional background and corporate performance in a comprehensive way for the first time and then takes the lead in considering the dynamics and complexity of corporate performance as well as discussing the influence of TMT functional background on four corporate performances. This study not only supports the effect that the social categorization theory has on TMTs but also offers some inspirations on the development of China’s IT companies.

scholarly journals Does Corporate Charitable Giving Help Sustain Corporate Performance in China?

2019 ◽  
Vol 11 (5) ◽  
pp. 1491 ◽  
Author(s):  
Keling Wang ◽  
Yaqiong Miao ◽  
Ching-Hui Su ◽  
Ming-Hsiang Chen ◽  
Zhongjun Wu ◽  
...  
Keyword(s):  
Charitable Giving ◽  
Corporate Performance ◽  
Sales Growth ◽  
Short Term ◽  
Return On Equity ◽  
Long Term Performance ◽  
Term Performance ◽  
The Impact ◽  
Total Sales

We examined whether corporate charitable giving (CCG) in China benefits corporate performance (CP) in terms of sales growth (SG), return on asset (ROA), return on equity (ROE), and Tobin’s Q (TQ), and revealed several findings. First, testing shows variation in the impact of CCG on CP. Whereas the ratio of corporate charitable giving (RCCG) to total sales revenue does not significantly enhance SG, ROA, and ROE, it is positively related to TQ. Second, the positive relationship between RCCG and TQ originates from non-state-owned firms (NSOFs) rather than state-owned firms (SOFs). Third, Chinese firms may use CCG as traditional philanthropy to enhance long-term performance instead of strategically using it to generate short-term performance. Lastly, an inverted U-shaped relationship exists between RCCG and TQ, especially for NSOFs.

Peru floods may bring economic woes, political gains

2017 ◽  
Keyword(s):  
Climate Change ◽  
Natural Disasters ◽  
Pacific Coast ◽  
Public Investment ◽  
Social Suffering ◽  
Short Term ◽  
Content Type ◽  
The Pacific ◽  
The Social

Significance Landslides and flooding the length of the Pacific coast of Peru have caused widespread damage to housing and infrastructure, revealing the vulnerability of the country’s largest cities to natural disasters. For President Pedro Pablo Kuczynski’s administration, the crisis brings short-term political respite, but also new problems of how to respond effectively to the social suffering caused. Impacts Responding to the crisis will involve reconfiguring this year’s budget, particularly increasing public investment. Spending priorities in other areas will make it hard to grapple with long-term preventative work. As one of the world’s most exposed countries to climate change, the costs of adaptation will be large.

Does underconfidence matter in short-term and long-term investment decisions? Evidence from an emerging market

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maqsood Ahmad
Keyword(s):  
Decision Making ◽  
Stock Exchange ◽  
Emerging Market ◽  
Investment Decision ◽  
Investment Decisions ◽  
Investment Strategies ◽  
Short Term ◽  
Content Type ◽  
Investment Decision Making

PurposeThe purpose of this article is to clarify the mechanism by which underconfidence heuristic-driven bias influences the short-term and long-term investment decisions of individual investors, actively trading on the Pakistan Stock Exchange.Design/methodology/approachInvestors' underconfidence has been measured using a questionnaire, comprising numerous items, including indicators of short-term and long-term investment decision. In order to establish the influence of underconfidence on the investment decisions in both the short and long run, a 5-point Likert scale questionnaire has been used to collect data from the sample of 203 investors. The collected data were analyzed using SPSS and AMOS graphics software. Hypotheses were tested using structural equation modeling technique.FindingsThis article provides further empirical insights into the relationship between heuristic-driven biases and investment decision-making in the short and long run. The results suggest that underconfidence bias has a markedly negative influence on the short-term and long-term decisions made by investors in developing markets. It means that heuristic-driven biases can impair the quality of both short-term and long-term investment decisions.Practical implicationsThis article encourages investors to avoid relying on cognitive heuristics, namely, underconfidence or their feelings when making short-term and long-term investment strategies. It provides awareness and understanding of heuristic-driven biases in investment management, which could be very useful for finance practitioners' such as investor who plays at the stock exchange, a portfolio manager, a financial strategist/advisor in an investment firm, a financial planner, an investment banker, a trader/broker at the stock exchange or a financial analyst. But most importantly, the term also includes all those persons who manage corporate entities and are responsible for making its financial management strategies. They can improve the quality of their decision-making by recognizing their behavioral biases and errors of judgment, to which we are all prone, resulting in more appropriate investment strategies.Originality/valueThe current study is the first to focus on links between underconfidence bias and short-term and long-term investment decision-making. This article enhanced the understanding of the role that heuristic-driven bias plays in the investment management and more importantly, it went some way toward enhancing understanding of behavioral aspects and their influence on the investment decision-making in an emerging market. It also adds to the literature in the area of behavioral finance specifically the role of heuristics in investment strategies; this field is in its initial stage, even in developed countries, while, in developing countries, little work has been done.

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.

IPO underpricing and long-term performance in China: the perspective of price limit policy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yuxin Wang ◽  
Guanying Wang
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Ipo Underpricing ◽  
Content Type ◽  
Price Limit ◽  
Good Policy ◽  
Public Offering ◽  
Long Term Performance ◽  
Term Performance

PurposeThe purpose of this paper is to explore how the price limit policy implemented in 2014 affects initial public offering (IPO) underpricing and long-term performance in China.Design/methodology/approachThe data are the IPOs from Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) between 2004 and 2018. The data are firstly divided into the IPOs before the price limit policy and the IPOs after the price limit policy according to the time of issuance. Then the two groups are divided into 4 subsamples according to the market blocks and the P/E ratio. The authors use multiple regression models to explore the effect of price limit policy in each subsample.FindingsThe first-day price limit system for IPOs is similar to the upward fuse mechanism, the purpose of which is to suppress IPO underpricing. However, this study finds that the policy does not suppress IPO underpricing, but increases the underpricing rate in all subsamples. Besides, the long-term performance in each subsample is different from each other. Main Board stocks’ long-term performance is worse after the policy. The policy makes Small and Medium Enterprise Board (SME Board) and Growth Enterprise Market Board (GEM Board) stocks with high P/E ratios perform better in the long term. For SME Board and GEM Board stocks with low P/E ratios, the policy makes no significant effect.Practical implicationsGood policy intentions may sometimes lead to counterproductive effects. However, since the long-term performance of each subsample is different, it is difficult to judge whether the policy should continue to be implemented or cancelled. Implementing different policies for different subsamples may be a better way to solve this problem.Originality/valueThis paper contributes to the study of IPO underpricing and long-term performance from the perspective of price limit policy.

KINERJA SURAT BERHARGA SETELAH INITIAL PUBLIC OFFERING

2005 ◽  
Vol 1 (2) ◽  
pp. 135
Author(s):  
Umi Murtini
Keyword(s):  
Initial Public Offering ◽  
Abnormal Return ◽  
Stock Exchange ◽  
T Test ◽  
Short Term ◽  
Sample Data ◽  
Level I ◽  
Public Offering ◽  
Term Performance

This study observes the pedormance of stock, shortierm and long-term in Jakarta Stock Exchange (BEJ). Sample data taken from firm that hove done IPO since the January 1990 untit December 2003, amount sample that used as much 255 firms. The daily abnormal return used as proxy perlormance by using Market-Adjusted Return Abnormal Model (Aggwwal $993). Short-term pedormance is based on a share performance atter, one day,' one month, 2 month and 3 month, Long-term perfonnance is b,osed on performance during 24 month. The result tests of one sampte t-test indicate that in short-term, cnerage abnormal return ore positive equal to i,8, 83 %. This result consistent with the previous research that performance in short-term experience, of the under pricing, Abnormal relurn that resuked in long term are arcrage negative equal to 21, 44%. This study Jinds the consistent phenomenon underperformance on a long term. And then the results of paired comparisont-test indicate that the short-term performance,is better lhqnlong-range performance, at level I %o.signtficance.Keywords: t Initiol Pubtic Offering, Performace of IPO, Abnormitl'Return, Underpricing and Underperform)

scholarly journals THE EFFECTS OF SHORT-TERM AND LONG-TERM ORIENTED MANAGERIAL BEHAVIOR ON MEDIUM-TERM FINANCIAL PERFORMANCE: LONGITUDINAL EVIDENCE FROM EUROPE

2013 ◽  
Vol 14 (2) ◽  
pp. 386-402 ◽  
Author(s):  
Matthias F. Brauer
Keyword(s):  
Financial Performance ◽  
Corporate Performance ◽  
Chief Executive ◽  
Well Being ◽  
Managerial Behavior ◽  
Medium Term ◽  
Short Term ◽  
Ceo Tenure ◽  
Term Performance

Short-term orientation aimed at maximizing quarterly results at the expense of long-term corporate performance and survival has become severely criticized. In the face of continuously decreasing chief executive officer (CEO) tenure, CEOs, however, seem to have few incentives to embrace long-term oriented behaviour. Instead, the question of foremost importance to self-interested CEOs is whether short-term orientation already harms financial performance in the three to four years of their own tenure, and whether CEOs stand a chance of benefiting from long-term orientation while still in office. CEOs thus face an intriguing ethical dilemma between optimizing their financial pay-off within their own tenure and securing the longer-term well-being of the corporation, its employees, and other major stakeholders. Consequently, our longitudinal study focuses on the medium-term performance implications of short-term and long-term orientation in Europe's largest publicly listed companies. Results indicate that short-term orientation negatively impacts on medium term performance while long-term oriented behavior is positively associated with corporate performance in the medium term. Our findings advance managerial myopia theory, and provide insights into one of the most central ethical dilemmas faced by corporate executives today.

An Empirical Study on Capital Structure and Corporate Performance of Chinese Listed Companies

2016 ◽  
Vol 5 (3) ◽  
Author(s):  
Fahd Al-Duais
Keyword(s):  
Capital Structure ◽  
Corporate Performance ◽  
Positive Impact ◽  
Stock Exchange ◽  
Listed Companies ◽  
Short Term ◽  
Chinese Listed Companies ◽  
The Impact ◽  
The Relationship

The relationship between level of debt and the companys performance remains an important unsolved issue in the field of financing. It is very important to know how Chinas listed companies manage their capital towards business growth. This paper investigates the impact of the capital structure on corporate performance of a sample of 711 listed companies on the Shenzhen Stock Exchange in China in 2014. The results indicates that there is a positive relation between financial leverage and corporate performance as well as there is a positive impact that the mixture of long-term debt and short-term debt (using total debt). This would help decision maker in the companies to finance firms operation in the both periods. On the other hand, the short term debt has a negative relation and impact on corporate performance compared to the changing in firm size which cannot change in the profitability of firms.

Interpersonal and IT-enabled communication in platform transactions: the contingent role of contract completeness and technology usage

2020 ◽  
Vol 120 (6) ◽  
pp. 1175-1194
Author(s):  
Qian Yang ◽  
Liping Qian ◽  
Xiande Zhao
Keyword(s):  
Interpersonal Communication ◽  
Synergetic Effect ◽  
Governance Mechanism ◽  
Technology Usage ◽  
Governance Mechanisms ◽  
Short Term ◽  
Content Type ◽  
Term Performance

PurposeThis paper assesses whether communication via interpersonal and IT channels accounts for short-term financial performance and long-term orientation and how these effects are influenced by contract completeness and technology usage in platform builder-platform participant relationships.Design/methodology/approachThe conceptual model and hypotheses are validated through a moderated regression of 384 survey responses from platform participant.FindingsThe empirical results indicate that interpersonal and IT-enabled communication contribute to both short-term financial gains and long-term orientation. The coexistence of interpersonal communication and IT-enabled communication has a synergetic effect on long-term orientation. Contract completeness positively moderates the effect of interpersonal communication on short-term performance while negatively moderating its effect on long-term orientation. Furthermore, contract completeness undermines the effect of IT-enabled communication on short-term performance. Technology usage enhances the effectiveness of interpersonal communication in generating long-term orientation.Originality/valueFirst, diverging from the extant research treating communication as a single dimension construct, this study differentiates communication on media channels and shows their separate and synergetic effects on short-term performance and long-term orientation. Second, our empirical findings indicate that the effects of communication are influenced by governance practices, which extends the communication literature. Third, previous studies have presented conflicting results concerning the role of governance mechanisms in inter-firm relationships. By showing that governance mechanisms also either support or suppress communication in generating performance for platform participants, this study extends the existing research on governance mechanisms. Finally, by regarding technology usage as a transactional governance mechanism, this study furthers our understanding of the role of technology in interfirm relationships.

The Sarbanes-Oxley Act and corporate acquisitions

2017 ◽  
Vol 43 (4) ◽  
pp. 452-470 ◽  
Author(s):  
Harjeet Singh Bhabra ◽  
Ashrafee Tanvir Hossain
Keyword(s):  
Market Competition ◽  
Abnormal Returns ◽  
Publicly Traded ◽  
Short Term ◽  
Corporate Acquisitions ◽  
Content Type ◽  
Tender Offers ◽  
Term Performance ◽  
The Impact

Purpose The purpose of this paper is to analyze and compare the performance of corporate acquisitions between the pre- and post-SOX periods, using both short-term and long-term analyses. Design/methodology/approach The sample includes 9,463 mergers and tender offers undertaken by publicly traded US firms between 1996 and 2009. The authors used the standard event study methodology for short-term performance analysis; Berkovitch and Narayanan (1993) method to identify merger motives; and standard benchmark adjusted return on assets (sales) (Barber and Lyon, 1996) and buy-and-hold abnormal returns (Mitchell and Stafford, 2000) to analyze long-term performance. Findings Compared to the pre-SOX period, US acquirers experience significantly higher announcement returns in the post-SOX period; the results are robust to various controls like bidder, target and deal characteristics, bidder management quality, and product market competition. Similar results (in favor of post-SOX US acquirers) are obtained with long-term post-acquisition operating and stock performance analyses. Research limitations/implications This paper only addressed domestic acquisitions. Originality/value This paper adds to the growing body of research on the impact of SOX on publicly traded US corporations. By examining corporate acquisitions, an important long-term investment decision for a firm, the paper shows that despite the complex nature of SOX, substantial compliance costs and the unintended negative consequence it engendered, the act had a beneficial impact in an important area of corporate finance.

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