Effect of board characteristics on firm value: evidence from India

2018 ◽  
Vol 7 (1) ◽  
pp. 41-72 ◽  
Author(s):  
Rakesh Kumar Mishra ◽  
Sheeba Kapil
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Firm Value ◽  
Structural Equation ◽  
Corporate Performance ◽  
Equation Modeling ◽  
Significant Positive Association ◽  
Data Set ◽  
Content Type ◽  
Board Characteristics

Purpose The purpose of this paper is to explore the relationship of board characteristics and firm performance for Indian companies. Design/methodology/approach Corporate governance structures of 391 Indian companies out of CNX 500 companies listed on National Stock Exchange have been studied for their impact on performance of companies. Structural equation modeling methodology has been employed on data for five financial years from 2010 to 2014 for selected companies. Market-based measure (Tobin’s Q) and accounting-based measure (return on asset) have been employed for measuring firm performance. Findings Empirical findings indicate that there is significant positive association between board size and firm performance. Board independence is found significantly related to firm performance. Number of board meetings is found to be sending positive signal to the market creating firm value. Separation of CEO and chairman of the board is found to be value creating and overburdened directors affect firm performance adversely. Findings also suggest that the governance-performance relationship is also dependent upon the type of performance measures used in the study. Research limitations/implications Limitations of this study are in terms of data methodology and possible omission of some variables. It is understood that the qualitative dynamics happening inside board meetings impact corporate performance. The strategic decisions-making process adopted by the boards to fight competition or to increase market share is not available in public domain easily. The decision-making processes and monitoring for implementation of these decisions could impact corporate governance-performance relationship. These parameters and their impact on corporate performance are not covered under the scope of the present study. However, the same could have thrown more light on governance-performance relationship. Originality/value The paper adds to the emerging body of literature on corporate governance-performance relationship in the Indian context using a reasonably wider and newer data set.

Board characteristics and firm value for Indian companies

2018 ◽  
Vol 10 (1) ◽  
pp. 2-32 ◽  
Author(s):  
Rakesh Kumar Mishra ◽  
Sheeba Kapil
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Firm Performance ◽  
Firm Value ◽  
Corporate Performance ◽  
Strategic Decision ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Content Type ◽  
Board Characteristics

Purpose This paper aims to explore the relationship between board characteristics and firm performance for Indian companies. Design/methodology/approach Corporate governance structures of 391 Indian companies out of CNX 500 companies listed on National Stock Exchange have been studied for their impact on performance of companies. Panel data regression methodology has been used on data for five financial years from 2010 to 2014 for the selected companies. Performance measures considered are market-based measure (Tobin’s Q) and accounting-based measure (return on asset [ROA]). Findings The empirical findings indicate that the market-based measure (Tobin’s Q) is more impacted by corporate governance than the accounting-based measure (ROA). There is a significant positive association between board size and firm performance. Board independence is found significantly related to firm performance. Number of board meetings is found to be sending positive signal to the market creating firm value. Separation of chief executive officer and chairman of the board is found to be value-creating, and overburdened directors affect firm performance adversely. Research limitations/implications Limitations of the study are in terms of methodology and possible omission of some variables. It is understood that the qualitative dynamics happening inside board meetings impact corporate performance. The strategic decision-making process adopted by the boards to fight competition or to increase market share is not easily available in public domain. The decision-making processes and monitoring for implementation of those decisions could impact corporate governance performance relationship. These parameters and their impact on corporate performance are not covered under the scope of the present study. Originality/value The paper adds to the emerging body of literature on corporate governance performance relationship in the Indian context by using a reasonably wider and newer data set.

scholarly journals Ownership structure, board of directors and firm performance: evidence from Taiwan

2019 ◽  
Vol 19 (1) ◽  
pp. 189-216 ◽  
Author(s):  
Mao-Feng Kao ◽  
Lynn Hodgkinson ◽  
Aziz Jaafar
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Firm Value ◽  
Listed Companies ◽  
Independent Directors ◽  
Data Set ◽  
Content Type ◽  
Listed Firms

PurposeUsing a data set of listed firms domiciled in Taiwan, this paper aims to empirically assess the effects of ownership structure and board of directors on firm value.Design/methodology/approachUsing a sample of Taiwanese listed firms from 1997 to 2015, this study uses a panel estimation to exploit both the cross-section and time–series nature of the data. Furthermore, two stage least squares (2SLS) regression model is used as robustness test to mitigate the endogeneity issue.FindingsThe main results show that the higher the proportion of independent directors, the smaller the board size, together with a two-tier board system and no chief executive officer duality, the stronger the firm’s performance. With respect to ownership structure, block-holders’ ownership, institutional ownership, foreign ownership and family ownership are all positively related to firm value.Research limitations/implicationsAlthough the Taiwanese corporate governance reform concerning the independent director system which is mandatory only for newly-listed companies is successful, the regulatory authority should require all listed companies to appoint independent directors to further enhance the Taiwanese corporate governance.Originality/valueFirst, unlike most of the previous literature on Western developed countries, this study examines the effects of corporate governance mechanisms on firm performance in a newly industrialised country, Taiwan. Second, while a number of studies used a single indicator of firm performance, this study examines both accounting-based and market-based firm performance. Third, this study addresses the endogeneity issue between corporate governance factors and firm performance by using 2SLS estimation, and details the econometric tests for justifying the appropriateness of using 2SLS estimation.

From managing customers to joint venturing with customers: co-creating service value in the digital age

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christine Falkenreck ◽  
Ralf Wagner
Keyword(s):  
Perceived Risk ◽  
Structural Equation ◽  
Business Models ◽  
Joint Venture ◽  
Digital Age ◽  
Partial Least Square ◽  
Least Square ◽  
Equation Modeling ◽  
Data Set ◽  
Content Type

Purpose Until today, scholars claim that the phenomenon of “co-creation” of value in an “interacted” economy and in the context of positive actor-to-actor relationships has not been adequately explored. This study aims to first to identify and separate the accessible values of internet of things (IoT)-based business models for business-to-business (B2B) and business-to-government (B2G) customer groups. It quantifies the drivers to successfully implement disruptive business models. Design/methodology/approach Data were gathered from 292 customers in Western Europe. The conceptual framework was tested using partial least square structural equation modeling. Findings Managing disruptions in the digital age is closely related to the fact that the existing trust in buyer-seller relationships is not enough to accept IoT projects. A company’s digitalization capabilities, satisfaction with the existing relationship and trust in the IoT credibility of the manufacturer drives the perceived value of IoT-based business models in B2B settings. Contrastingly, in B2G settings, money is less important. Research limitations/implications Research refers to one business field, the data set is of European origin only. Findings indicate that the drivers to engage in IoT-related projects differ significantly between the customer groups and therefore require different marketing management strategies. Saving time today is more important to B2G buyers than saving money. Practical implications The disparate nature of B2B and B2G buyers indicates that market segmentation and targeted marketing must be considered before joint-venturing in IoT business models. To joint venture supply chain partners co-creating value in the context of IoT-related business models, relationship management should be focused with buyers on the same footing, as active players and co-developers of a personalized experience in digital service projects. Originality/value Diverging from established studies focusing on the relationship within a network of actors, this study defines disruptive business models and identifies its drivers in B2B and B2G relationships. This study proposes joint venturing with B2B and B2G customers to overcome the perceived risk of these IoT-related business models. Including customers in platforms and networks may lead to the co-creation of value in joint IoT projects.

scholarly journals Toward Firm Performance in Indonesia: The Role of Good Corporate Governance and Investment Opportunity Set

2021 ◽  
Vol 17 (1) ◽  
pp. 81-90
Author(s):  
Dedi Rusdi ◽  
Indri Kartika ◽  
Maya Indriastuti
Keyword(s):  
Corporate Governance ◽  
Structural Equation Modeling ◽  
Firm Performance ◽  
Structural Equation ◽  
Equation Modeling ◽  
Investment Opportunity ◽  
Purposive Sampling ◽  
Good Corporate Governance ◽  
Investment Opportunity Set

Abstract: This study examined the role of good corporate governance and investment opportunity set in maintaining firm performance. This study's sample population comprised 240 manufacturing companies listed on the Indonesia Stock Exchange from 2016 to 2019. The research sample was selected using a purposive sampling method. The data were analyzed by using structural equation modeling analysis (SEM). The results showed that good corporate governance in terms of board size had a negative effect on firm performance. Meanwhile, good corporate governance in terms of board independence and investment opportunity set had a positive effect on firm performance.Keywords: good corporate governance, investment opportunity set, firm performance Menuju Kinerja Perusahaan di Indonesia: Peran Good Corporate Governance dan Investment Opportunity Set Abstrak: Studi ini menguji peran good corporate governance dan investment opportunity set dalam menjaga kinerja perusahaan. Populasi sampel penelitian terdiri dari 240 perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia dari tahun 2016 hingga 2019. Sampel penelitian dipilih dengan menggunakan metode purposive sampling. Analisis data menggunakan analisis structural equation modeling (SEM). Hasil penelitian menunjukkan bahwa good corporate governance ditinjau dari ukuran dewan komisaris berpengaruh negatif terhadap kinerja perusahaan. Sedangkan good corporate governance ditinjau dari independensi dewan komisaris dan investment opportunity set berpengaruh positif terhadap kinerja perusahaan.Kata kunci: good corporate governance, investment opportunity set, kinerja perusahaan

Green marketing programs as strategic initiatives in hospitality

2015 ◽  
Vol 29 (2) ◽  
pp. 81-92 ◽  
Author(s):  
Mark Scott Rosenbaum ◽  
Ipkin Anthony Wong
Keyword(s):  
Firm Value ◽  
Structural Equation ◽  
Economic Value ◽  
Green Marketing ◽  
Loyalty Programs ◽  
Equation Modeling ◽  
Content Type ◽  
The Impact ◽  
Guest Loyalty

Purpose – This paper aims to investigate a guest’s subjective appraisal of a hotel’s green marketing program, or green equity, along with value, brand and relationship equities on guest loyalty. Design/methodology/approach – Study 1 presents three models to explicate the role of a luxury hotel’s green initiatives in influencing guest loyalty. By means of structural equation modeling, one model emerges with the best fit. Study 2 examines how tourists assign economic value to a hotel’s green programs. Findings – Green equity plays a significant role in customers’ overall assessment of a hotel’s marketing programs; however, the effect is weaker when compared with the other indicators, including a hotel’s value proposition, brand image and loyalty programs. Furthermore, the results reveal that tourists are willing to pay a price premium for a hotel’s green marketing programs. Research limitations/implications – The paper links green marketing to the customer equity model and clarifies the impact of green marketing programs on loyalty and profitability. However, the study was conducted among luxury hotel guests and tourists in Macau, a leading gambling destination; thus, these customers might not have been concerned with green marketing initiatives. Practical implications – The results show that green initiatives are beneficial as long as managers include these initiatives in their overall strategic marketing programs that also promote firm value propositions, brand images and reputation. Originality/value – The paper clarifies the role of green marketing programs in hospitality and shows how hotels can benefit from enhanced guest loyalty and decreased operational expenses by implementing green initiatives.

The role of national culture in the impact of board gender diversity on firm performance: evidence from a multi-country study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Navaz Naghavi ◽  
Saeed Pahlevan Sharif ◽  
Hafezali Bin Iqbal Hussain
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Data Set ◽  
Content Type ◽  
Board Gender Diversity ◽  
The Impact

PurposeThis study seeks to add more insights to the debate on “whether”, “how”, and “under which condition” women representation on the board contributes to firm performance. More specifically, the current study aims to investigate if the effect of board gender diversity on firm performance is dependent on macro factors of national cultures.Design/methodology/approachThe authors used the generalized method of moments regression and a data set consists of 2,550 company year observations over 10 years.FindingsThe results indicated that cultural variables interact with board diversity to influence firm performance. Having women on the board in countries with high power distance, individualist, masculine and low-uncertainty avoidance culture influences the firm performance negatively.Originality/valueThe findings indicate that the effects of corporate governance structure on firm performance depends on culture-specific factors, providing support for the argument that institutional norms that are governed by cultural norms affect the effectiveness of corporate governance structure.

Dynamic capabilities: interrelations and distinct effects on performance in low and high competitive intensity environments

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amiram Markovich ◽  
Kalanit Efrat ◽  
Daphne R. Raban
Keyword(s):  
Firm Performance ◽  
Structural Equation ◽  
Dynamic Capabilities ◽  
Equation Modeling ◽  
Company Performance ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Competitive Intensity ◽  
Content Type ◽  
Impact Performance

PurposeThis study aims to augment the understanding of dynamic capabilities (DCs) by exploring the interrelations among the DC categories (sensing, seizing, reconfiguring) and the distinct impact of each DC on firm performance under low and high levels of competitive intensity.Design/methodology/approachThe analysis is based on a cross-sectional survey of 139 managers in Israel. The data were collected through Web-based questionnaires using the Qualtrics software. A two-stage data analysis was performed using structural equation modeling (SEM).FindingsThe findings indicate that DCs follow a sequence in which sensing drives seizing, which, in turn, enhances reconfiguring. The effects of sensing are mainly manifested through its direct impact on seizing, with no evidence for an impact of sensing on company performance. Moreover, under low competitive intensity, only seizing appears to impact performance, while under high competitive intensity, reconfiguring joins seizing in improving firm performance.Originality/valueThe study's findings advance the debate on the direct vs sequential nature of DCs by indicating an internal DC sequence. Our research also advocates for a crucial role of sensing in enhancing DCs, regardless of the level of competitive intensity. Furthermore, this research expands the understanding of the consequences of DCs and enables the prioritization of DC categories under low and high competitive intensity.

Emotional exhaustion as a mediator among workplace loneliness, work alienation and turnover intention

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Didem ÖZTÜRK ÇİFTCİ
Keyword(s):  
Emotional Exhaustion ◽  
Turnover Intention ◽  
Structural Equation ◽  
Shopping Mall ◽  
Equation Modeling ◽  
Data Set ◽  
Bootstrap Analysis ◽  
Content Type ◽  
Mediating Role ◽  
Work Alienation

PurposeThe purpose of this study is to determine the effect of loneliness and alienation in the workplace on the intention of leaving employment and whether emotional exhaustion has a mediating role in this effect.Design/methodology/approachThe hypotheses generated within the framework of the study model were evaluated by using the data set obtained from 402 survey participants working at nine shopping malls in the Central and Eastern Black Sea regions of Turkey and statistical analysis programs. In this context, the confirmatory factor analysis (CFA) was used to determine the validity of the scale and the structural equation modeling (SEM) was used to test the research hypotheses.FindingsThe study reveals that loneliness and alienation in the workplace have an effect on the intention of leaving employment and that this effect is fully mediated by emotional exhaustion. Whether this full mediating role determined by the SEM is meaningful or not was evaluated by Bootstrap analysis and the results revealed that the effect is meaningful.Practical implicationsDeveloping effective communication channels that will prevent the employee from feeling isolated at work and eliminating the pressure and inadequate physical working conditions created by unrealistic sales targets are recommended. In addition, it is thought that if employees are included in decision-making processes and have sufficient autonomy related to the job, work alienation can be prevented.Originality/valueThis research is important in terms of evaluating shopping centers, which are accepted as the symbol of consumption today, not only with their economic aspects but also with their employees. In this context, the research has revealed that shopping mall employees want to leave their jobs due to emotional exhaustion caused by loneliness and alienation at work.

Participatory HRM and firm performance

2019 ◽  
Vol 41 (5) ◽  
pp. 1098-1119 ◽  
Author(s):  
Neha Gahlawat ◽  
Subhash C. Kundu
Keyword(s):  
Firm Performance ◽  
Organizational Climate ◽  
Structural Equation ◽  
Affective Commitment ◽  
Intention To Leave ◽  
Employee Attitudes ◽  
Primary Data ◽  
Equation Modeling ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between participatory HRM and firm performance through a series of mediators. Design/methodology/approach Primary data were collected from 569 respondents belonging to 207 organizations operating in India. Structural equation modeling and bootstrapping via PROCESS were used to analyze the hypothesized relationships between participatory HRM and firm performance. Findings The study has highlighted that participatory HRM in the form of self-managed teams, flexible work arrangements and empowerment results in better organizational climate, heightened affective commitment, reduced intention to leave and enhanced firm performance. Furthermore, it has been established that organizational climate, affective commitment and intention to leave serially mediate the relationship between participatory HRM and firm performance. Practical implications The study gives strong indications that adopting bundle of participatory HRM practices is beneficial for generating positive organizational climate, enhanced employee attitudes and superior firm performance. Originality/value By establishing serial mediation through organizational climate, affective commitment and employees’ intention to leave, this study brings new insights into the interpretation of underlying mechanism existing between participatory HRM and firm performance, thus uniquely contributes to the HRM and OB literature.

Impact of business model innovations on SME’s innovativeness and performance

2019 ◽  
Vol 14 (4) ◽  
pp. 521-539 ◽  
Author(s):  
Rimantas Gatautis† ◽  
Egle Vaiciukynaite ◽  
Asta Tarute
Keyword(s):  
Business Model ◽  
Structural Equation ◽  
Positive Impact ◽  
Equation Modeling ◽  
Future Research ◽  
Data Set ◽  
Content Type ◽  
Innovation Activities ◽  
Organizational Inertia ◽  
Multiple Characteristics

Purpose Business model innovations (BMIs), their drivers and outcomes are attracting increasing attention in academic literature. However, previous studies have mainly focused on large companies, while knowledge of BMI in small-to-medium-sized enterprises (SMEs) is limited. Therefore, the purpose of this paper is to add new insights into how related BMI drivers, practices and outcomes are in relation to SMEs. Design/methodology/approach An extensive review of the existing literature was performed. Consequently, the relationships between BMI drivers, BMI practices and outcomes of BMI were developed as a conceptual framework. An empirical study was carried out. A structural equation modeling (SEM) procedure was used to empirically test the model using a quantitative data set of Lithuanian SMEs (n=73). Findings The study provides insights into the relations between BMI drivers, BMI practices and outcomes of BMI in SMEs. The findings of SEM, four drivers (innovation activities, strategic orientation, market and technology turbulence, respectively) are indicated to contribute to BMI of SMEs. In addition, the results proved that the implementation of BMI practices leads to strategic and architectural changes in firms and has a positive impact on SMEs performance and innovativeness. Research limitations/implications Empirical research is focused on a limited number of internal and external BMI drivers, which have an influence on BMI in SMEs from one geographical region. Consequently, there are many external and internal BMI drivers which also may have an influence on BMI in SMEs, such as industry life cycle, organizational inertia and leadership. Meanwhile, SMEs possess multiple characteristics, i.e. a phase of maturity, gender of CEO, firm size and industry; therefore, the aforesaid aspects are considered to be significant limitations. In addition, the importance of SMEs characteristics as mediators for the effects on a firm’s performance and innovativeness should be considered in future research avenues. Practical implications Findings of this research can be used by SME managers to better understand how firms might actively engage in BMI practices, what drivers lead to BMI and, in turn, affect their firm’s performance and innovativeness. SME managers should be encouraged to pay attention to strategic and architectural changes of BM that can contribute to enterprise performance and innovativeness. Originality/value This paper adds to the stream of BMI research by empirically exploring drivers and outcomes of BMI in SMEs. In addition, this paper fulfills research gaps proposed by Bouwman et al. (2018), Foss and Saebi (2017), Heikkilä, Bouwman and Heikkilä (2018) and Lambert and Davidson (2013), and enhances the current overall understanding of BMIs.

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