Ownership concentration, innovation and firm performance: empirical study in Indian technology SME context

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Manali Chatterjee ◽  
Titas Bhattacharjee
Keyword(s):  
Corporate Governance ◽  
Value Creation ◽  
Cultural Context ◽  
Positive Influence ◽  
Ownership Concentration ◽  
Cross Sectional ◽  
Content Type ◽  
Future Studies ◽  
Concentrated Ownership ◽  
The Impact

PurposeThis study aims to understand the influence of R&D intensity and ownership concentration on performance of Indian technology SMEs, at the intersection of “value creation” perspective of corporate governance and country cultural context in innovation.Design/methodology/approachCross-sectional data of 264 Indian technology SMEs have been employed to probe the impact of ownership and R&D intensity on market performance of the technology SMEs.FindingsThis study does not find support of individual influence of R&D intensity on SME performance. The authors find support for the “value creation” hypothesis of corporate governance in Indian technology SME context. This study finds that interaction of promoter's ownership concentration and R&D intensity has a positive influence on the performance of Indian technology SMEs.Research limitations/implicationsThis study has deployed cross-sectional data. Future studies can examine the “value creation” hypothesis based on panel data for a long-run understanding. Ownership can be further segregated into different categories of ownership in future studies.Practical implicationsThis study underscores on distinct necessity in the concentrated ownership in the context of Indian technology SMEs. The findings of the study may encourage policymakers to focus on the “value creation” of the technology SMEs than “value protection.”Originality/valueThis study aims to understand the market value of R&D practice of SMEs. The findings of this study establish that R&D intensity individually may not have any significant influence on SME performance. R&D intensity coupled with concentrated ownership can significantly increase SME performance. Thus, this study identifies factors that can help in SME innovation and growth options. Additionally, this study advocates for the fact concentrated ownership in technology SMEs of India by establishing the link with SME performance.

Ownership as a determinant of chairperson activity: a study of Nordic listed companies

2015 ◽  
Vol 7 (4) ◽  
pp. 412-428
Author(s):  
Tor Brunzell ◽  
Jarkko Peltomäki
Keyword(s):  
Working Hours ◽  
Chief Executive ◽  
Ownership Concentration ◽  
Content Type ◽  
Listed Firms ◽  
Concentrated Ownership ◽  
The Board Of Directors ◽  
The Impact ◽  
The Empirical Analysis ◽  
A Company

Purpose – The purpose of this study is to explicitly focus on the roles of ownership concentration, ownership by the board, the chief executive officer (CEO) and the chairperson in the involvement and capabilities of chairpersons and other governors in their work. Design/methodology/approach – In this study, the authors investigate the impact of the concentration of ownership, the ownership of the board, the CEO and the chairperson on the chairperson’s activity when the roles of the chairperson and the CEO are separated The empirical analysis of this study is based on a survey sent to Nordic listed firms. Findings – The results show that the ownership characteristics of a company are important in determining the chairperson’s working hours, the chairperson’s communication with the CEO and the performance of governance activity. In addition, the authors found that while the ownership of the chairperson and the board of directors and ownership concentration improve governance activity, CEO ownership may undermine governance activity. Research limitations/implications – The primary implication of the study is that both ownership by internal governors and ownership concentration play an important role in determining the involvement of internal corporate governors. Originality/value – The study provides unique evidence that ownership by the chairperson, concentrated ownership and ownership by the board can potentially mitigate the costs of separating the roles of the chairperson and the CEO.

Board characteristics, ownership concentration and firms’ performance

2019 ◽  
Vol 8 (2) ◽  
pp. 146-165 ◽  
Author(s):  
Abdul Waheed ◽  
Qaisar Ali Malik
Keyword(s):  
Corporate Governance ◽  
Financial Sector ◽  
Resource Dependence Theory ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Data Set ◽  
Content Type ◽  
Listed Firms ◽  
Board Characteristics ◽  
Concentrated Ownership

Purpose The purpose of this paper is to extend the understanding and application of interactive ties creating value through board characteristics, ownership concentration and firms’ performance by using a contingent theoretical-based framework based on the amalgamation of resource dependence theory, stakeholder theory, agency theory, stewardship theory and institutional theory in a country with weak political environment. Design/methodology/approach This study includes a sample of an unbalanced panel of 309 non-financial sector firms listed on Pakistan Stock Exchange (PSX) from 2005 to 2016. In order to address the issue of unobserved heterogeneity, simultaneous and dynamic endogeneity, the current study employed the technique Arellano–Bond dynamic panel data estimation under assumptions of GMM (Arellano–Bond, 1991). Findings The empirical results suggest that the presence of concentrated ownership moderates and helps to overcome the agency problems through different governance mechanisms (such as board size, independent directors and CEO duality). The larger boards are found to be beneficial whereas the higher representation of independent directors in the board is found to be detrimental for Pakistani firms. Research limitations/implications Limitations of the study are, first the current study has analyzed public-listed firms from the non-financial sector, and second the study has only focused on the financial aspect of the performance. The future research could include other proxies of corporate governance and ownership structure such as board diversity and meetings, audit committee and managerial ownership, etc. Practical implications The research also helps Pakistani policy makers in numerous ways. First, the current study confirms the monitoring and expropriation effect of ownership concentration in corporate governance and performance mechanism. Thus, the Security and Exchange Commission of Pakistan (SECP) should make such policies which protect the corporate board against the influence of concentrated ownership so that the interests of the minority shareholders are protected. Second, SECP should ensure that all the listed firms declare a comprehensive profile of their directors (such as academic qualification, age and experience) in their annual reports for the better understanding of the governance−performance mechanism. Originality/value The current study augments the emerging body of literature on corporate governance and firm performance mechanism through the amalgamation and testing of existing theories in an emerging economy like Pakistan by using wider and newer data set.

Handling conflict at work – the impact of active and agreeable conflict styles

2016 ◽  
Vol 27 (1) ◽  
pp. 50-61 ◽  
Author(s):  
Angela Shin-yih Chen ◽  
Yu-hsiang Hou ◽  
I-heng Wu
Keyword(s):  
Job Performance ◽  
Conflict Management ◽  
Research Design ◽  
Cultural Context ◽  
Positive Impact ◽  
Cross Sectional ◽  
Content Type ◽  
Conflict Style ◽  
The Impact ◽  
And Training

Purpose – This paper aims to explore the relationships between emotional intelligence (EI), conflict management styles and job performance in a Chinese cultural context. Design/methodology/approach – The present paper uses a cross-sectional research design. Paper-based questionnaires were distributed to employees working in the R & D department of a science and technology institute in Taiwan. In total, 300 questionnaires were distributed and 248 valid questionnaires were analyzed, with a return rate of 81.4 per cent. Findings – The results show that EI has a positive impact on job performance. Furthermore, agreeable conflict style positively moderated between EI and job performance, whereas active conflict style has negative moderating effect. Research limitations/implications – Due to the research design, sample and data collection method, the research results may lack representativeness. Therefore, researchers are encouraged to use a different approach in the future. Practical implications – Organizations should strengthen employees’ EI and conflict management abilities to improve job performance. Organizations can apply the results of this study in accordance with their policy on recruitment, selection and training. Originality/value – Organizations should strengthen employees’ EI and conflict management abilities to improve job performance. Organizations can apply the results of this study in accordance with their policies on recruitment, selection and training.

Mediating role of hedonic and utilitarian brand attitude between eWOM and purchase intentions: a context of brand fan pages in Facebook

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sambashiva Rao Kunja ◽  
Arvind Kumar ◽  
Bramhani Rao
Keyword(s):  
Social Networking Sites ◽  
Structural Equation ◽  
Positive Influence ◽  
Brand Attitude ◽  
Consumer Electronics ◽  
Cross Sectional ◽  
Content Type ◽  
Theoretical Contribution ◽  
The Impact

Purpose The purpose of this study is to adopt stimulus-organism-response (S-O-R) theory to reveal the impact of electronic word-of-mouth (eWOM) on buying intentions of young consumers in the presence of hedonic brand attitude (HBA) and utilitarian brand attitude (UBA) as mediators, among smartphone customers in the context of brand fan pages in Facebook. Design/methodology/approach The paper uses a single cross-sectional design to survey a sample of 326 young online customers present in leading smartphone brand fan pages on Facebook in India. A structured questionnaire was used to collect data and replies were recorded on a Likert scale (five-point). The data was subjected to structural equation modelling for model and hypotheses testing. Findings eWOM has a significantly positive influence on the buying intentions of the young. Both HBA and UBA partially mediate the influence of eWOM on buying intentions. Research limitations/implications The study examines only the personal-oriented functions of attitude and does not investigate the role of social dimensions of attitudes. Its scope is confined to smartphones in the consumer electronics segment and only Facebook among social networking sites. Practical implications A theoretical contribution to eWOM literature is made by studying it under the lens of S-O-R theory and functional theory of attitudes. Measurement of two different dimensions of attitude, i.e. hedonic and utilitarian, may facilitate managers to comprehend the source of variance in consumers’ decision-making behaviour in the online context. Originality/value The only study to explore brand attitude as a mediator in its multi-dimensional form, in the context of social eWOM.

The effects of ownership concentration and corporate governance on corporate risk-taking

2019 ◽  
Vol 33 (1) ◽  
pp. 252-267 ◽  
Author(s):  
Seksak Jumreornvong ◽  
Sirimon Treepongkaruna ◽  
Panu Prommin ◽  
Pornsit Jiraporn
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Ownership Concentration ◽  
Corporate Policies ◽  
Content Type ◽  
Instrumental Variable Analysis ◽  
Developed Economies ◽  
Concentrated Ownership ◽  
Corporate Risk ◽  
Variable Analysis

Purpose This study aims to investigate the effects of ownership concentration and corporate governance on the extent of risk-taking in an important emerging economy – Thailand. Design/methodology/approach The results are corroborated by additional analysis, including an instrumental-variable analysis and propensity score matching. Findings Large owners are under-diversified and are thus more vulnerable to the firm’s idiosyncratic risk. Therefore, they tend to advocate less risky corporate policies and strategies. Consistent with this notion, the authors find that more concentrated ownership induces firms to take significantly less risk. Originality/value Ownership in Thai firms is substantially more concentrated than that in developed economies, providing a unique opportunity to study the effect of highly concentrated ownership on risk-taking.

scholarly journals Do corporate governance and ownership structure impact dividend policy in emerging market during financial crisis?

2017 ◽  
Vol 18 (3) ◽  
pp. 274-297 ◽  
Author(s):  
Mili Mehdi ◽  
Jean-Michel Sahut ◽  
Frédéric Teulon
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Ownership Structure ◽  
Dividend Policy ◽  
East Asian ◽  
Emerging Countries ◽  
Ownership Concentration ◽  
Ceo Duality ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to study the impact of the ownership structure and board governance on dividend policy in emerging markets. The authors test whether the effects of corporate governance on dividend policy change during crisis periods. Design/methodology/approach The authors use a panel regression approach on a sample of 362 non-financial listed firms from East Asian and Gulf Cooperation Council countries. Findings The results provide evidence that dividend payout decision increases with institutional ownership and board activity. The authors find that in emerging countries, dividend policy of firms with CEO duality and without CEO duality does not depend on the same set of factors. It is shown that the ownership concentration and board independency affect significantly the dividend policy of firms with COE duality. Finally, the results show that during the recent financial crisis, dividend decision is inversely related to CEO duality, board size and the frequency of board meetings. Research limitations/implications Other variables of corporate governance and ownership structure can be studied more in depth. The results can be directly compared to an alternative sample of developed countries. Practical implications This study is of particular interest for managers and shareholders when adjusting their strategies of dividend payout during financial crisis. Originality/value The authors employ a specific approach to investigate the impact of CEO duality on dividend policy in East Asian countries. An important aspect of the results is that that for firms with CEO who is also the chairperson, the dividend decision is negatively related to ownership concentration and board independence. This research contributes to the understanding of dividend policy by testing whether the impact of corporate governance on dividend policy changes during crisis periods in emerging countries. To the best of the authors’ knowledge, this work is the first to directly address this issue from this perspective.

scholarly journals Audit committee attributes and firm performance: evidence from Malaysian finance companies

2015 ◽  
Vol 23 (3) ◽  
pp. 206-231 ◽  
Author(s):  
Basiru Salisu Kallamu ◽  
Nur Ashikin Mohd Saat
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Secondary Data ◽  
Primary Data ◽  
Islamic Banking ◽  
Related Services ◽  
Content Type ◽  
Future Studies ◽  
Before And After ◽  
The Impact

Purpose – The purpose of this paper is to examine the impact of audit committee (AC) attributes on the performance of finance companies in Malaysia in both period before and after the Malaysian Code on Corporate Governance (MCCG) was issued in order to determine which of the AC attributes enhances performance of finance companies in Malaysia. Design/methodology/approach – The population of the study comprises firms listed under finance sector of the main market of Bursa Malaysia. The number of firms listed on the main market of Bursa Malaysia as at the time of data collection (2012) was 822, out of which 37 were finance firms. Since the number of finance companies listed on the main market was only 37, all companies were used as sample for this study. This comprises companies involved in commercial, investment and Islamic banking, insurance, Takaful and other finance-related services. The sample for the period prior to MCCG varies over the period of observation. The number of finance companies in 1992, 1993, 1994, 1995 and 1996 was 36, 40, 44, 47 and 54, respectively. The sample comprises companies in commercial banking, investment banking, Islamic banking, insurance, Takaful and other finance-related services. The sample comprises firms listed on the main board of Kuala Lumpur stock exchange as it was called before the name was changed to Bursa Malaysia. The companies listed under the Ace market are not included due to their small number and because they are subject to different listing requirements. The list of the finance companies for the period 2007-2011 is obtained from the web site of Bursa Malaysia while for the period 1992-1996, the list is obtained from Bursa Malaysia knowledge centre. The observation period for the study covers financial period from 2007 to 2011 which represents post MCCG period while period from 1992 to 1996 represents the period before MCCG. Findings – The findings suggests a significant positive relationship between independent AC members and profitability while dual membership of directors on audit and nomination committee is significant and negatively related with profitability. The result supports agency theory which suggests that independent directors provide effective monitoring of the management thereby enhancing profitability and reducing possibility for opportunistic behavior by the management and ultimately enhancing performance. In addition, the result indicates that there was significant improvement in corporate governance in finance companies after the MCCG was issued compared to the period before it was issued. Research limitations/implications – The study focussed only on finance companies listed on Bursa Malaysia. The attributes examined include independence, expertise, experience, executive membership and interlock of directors, future studies could examine other attributes such as internal process of the committee and personal characteristics of the directors. Furthermore, the study used secondary data future studies could use primary data or a combination of primary and secondary data. The study only examined the period before MCCG and after the code was issued, future study could examine the impact of the first and second revision and compare it with period after the first and second revision. Practical implications – The findings contribute to the literature and the understanding of the influence of AC attributes such as independence and experience of the directors on the committee by showing an association between director independence, expertise, experience and improved performance. Management and board of companies may use the findings to make appropriate choices about AC attributes and governance mechanisms to improve performance particularly with regards to independence, expertise, experience and interlock of the directors. Social implications – The study has provided policy makers with a better understanding of the various features a AC should have which could be incorporated in future policy formulation in order to safeguard investments of shareholders, protect the interest of various stakeholders and enhance the flow of capital and foreign direct investment into finance companies and the economy in general. Comparison of the result between the pre MCCG and post MCCG period shows an improvement in corporate governance in finance companies after the MCCG was issued. This implies that the initial issue of MCCG impacted positively on the governance of the finance companies. Originality/value – To best of the authors knowledge the study is the first to examine the attributes of AC in finance sector as a whole and to examine the impact in the period before and after the MCCG was issued.

Tax avoidance, value creation and CSR – a European perspective

2017 ◽  
Vol 17 (5) ◽  
pp. 803-821 ◽  
Author(s):  
Dirk Kiesewetter ◽  
Johannes Manthey
Keyword(s):  
Corporate Governance ◽  
Social Responsibility ◽  
Market Economy ◽  
Value Creation ◽  
Tax Avoidance ◽  
Effective Tax Rate ◽  
Content Type ◽  
Tax Rate ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to answer how corporate governance and corporate social responsibility (“CSR”) affect the relationship between value creation and tax avoidance. This study further analyses the impact of the institutional environment, i.e. whether a country is rather a liberal or a coordinated market economy, on the relationship between CSR and tax avoidance. Design/methodology/approach The empirical analysis comprises a panel data set of 7,924 observations for the years from 2005 to 2014 for European companies. The relationship between value creation and tax avoidance is tested by grouping the sample in high and low CSR performers. Similarly, the impact of the type of market economy is analysed for the firms. Findings The research design does not find evidence that tax avoidance is creating value. The empirical findings reveal that there is a positive relationship between value creation and the effective tax rate for firms with low social and environmental characteristics. Further, this analysis could show that stronger corporate governance is associated with a lower effective tax rate in both coordinated and liberal market economies. The analysis identifies social strengths being associated with a higher effective tax rate for coordinated market economies. Practical implications It is proposed to encourage CSR disclosure. The creation of incentives for social strengths could increase tax revenue. Firms should reconsider whether the engagement in tax avoidance is worth it and pursue social responsibility to achieve higher value creation for their stakeholders. Originality/value The paper challenges the intuitive expectation that tax avoidance creates value. It is suggested that the governance and CSR culture, as well as the tax legislation in Europe, is different to the USA. Conclusively, tax avoidance is not generating value for the European sample.

scholarly journals Can we predict the likelihood of financial distress in companies from their corporate governance and borrowing?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sara Sofia Gomes Mariano ◽  
Javad Izadi ◽  
Maurice Pratt
Keyword(s):  
Corporate Governance ◽  
Financial Distress ◽  
Chief Executive ◽  
Governance Structure ◽  
Ownership Concentration ◽  
Governance Structures ◽  
Content Type ◽  
Empirically Supported ◽  
The Uk ◽  
The Impact

Purpose The purpose of this study is to investigate the impact of corporate governance structures on the likelihood of financial distress in UK listed companies. The paper examines the impact of borrowing and corporate governance structures on financial distress likelihood in UK companies. Design/methodology/approach The study uses a quantitative approach with financial, governance and borrowing measures and data from 270 firm-observations between 2010 and 2018. The study analyses the impact of borrowing and corporate governance structures to indicate financial distress likelihood in British companies. Corporate governance variables such as ownership concentration, independence indicators, chief executive officer duality, director remuneration and corporate loans are considered, as well as the UK Corporate Governance Code. Findings The results indicate that companies with low ownership concentration and a low degree of independence are more likely to incur financial distress. Larger boards and better director remuneration can reduce financial distress likelihood and the existence of corporate loans can increase this likelihood. Empirical consideration of corporate borrowing is a new contribution to the literature. Originality/value Variables are highlighted and aggregated that have not otherwise been studied together; the UK Corporate Governance Code’s main ideas are empirically supported; the study is useful for defining corporate governance structure strategies.

Does personality influence effectual behaviour?

2019 ◽  
Vol 26 (3) ◽  
pp. 467-484 ◽  
Author(s):  
Rainer Hensel ◽  
Ronald Visser
Keyword(s):  
Decision Making ◽  
Risk Analysis ◽  
Personality Traits ◽  
Business Models ◽  
Positive Influence ◽  
Strategic Decision ◽  
Cross Sectional ◽  
Final Model ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to develop a model to analyse what personality traits impact entrepreneurial cognitive and social strategic decision-making skills, originating from the effectuation framework. Design/methodology/approach A total of 128 participants from an entrepreneurial pre-launch programme were assessed by experienced incubator and business coaches. Personality was measured by a Big Five test. Based on a confirmatory factor analysis, the relationships were analysed between personality and three core dimensions of the effectuation framework: the bird-in-hand principle, the crazy quilt principle and the pilot in the plane principle. Findings Specific patterns (moderation effects) as opposed to levels of personality traits proved to be relevant. The bird-in-hand and the crazy quilt principles are related to the moderating effect between sensitivity to feedback, sociability and ambition. The pilot in the plane principle was related to the whole pattern of entrepreneurial key qualities embedded in the extraversion domain. Furthermore, relationships of personality with key issues in the effectuation framework were found, examples being reflecting on a high diversity of means or on own talents, conducting a thorough risk analysis and engaging in inspirational networking. The final model revealed a direct positive influence of the capacity to conduct a thorough risk analysis on the overall capacity to apply the effectuation principles. Research limitations/implications A limitation of this study is the exclusion of the lemonade principle from the final model. This being based on unsatisfying model fit indices. Another limitation is the cross-sectional design, as well as the chosen research context: the pre-launch entrepreneurial programme. Practical implications The research results shed a light on the impact that personality plays in adoption of effectual decision making. Social implications The effectuation framework is widely used by individual entrepreneurs, SMEs and start-ups, to design innovative business models or implement an up-scaling strategy. Originality/value Little is known about the underlying mechanisms of the effectuation framework. Moreover, evidence-based insights are offered to entrepreneurs that intent to mobilise effectual behaviours.

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