Top management team (TMT) age diversity and firm performance: the moderating role of the effectiveness of TMT meetings

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sutarti Sutarti ◽  
Akhmad Syakhroza ◽  
Vera Diyanty ◽  
Setio Anggoro Dewo
Keyword(s):  
Positive Impact ◽  
Wide Spectrum ◽  
Negative Influence ◽  
The Body ◽  
Annual Reports ◽  
Bank Performance ◽  
Governance System ◽  
Content Type ◽  
Age Diversity ◽  
Age Related

Purpose This study aims to investigate the direct effect of directors’ age diversity, and its interaction effect with the effectiveness of TMT meetings on bank performance. Design/methodology/approach Quantitative data were extracted from the bank’s annual reports for the six years 2011–2016. Age diversity was calculated using the coefficient of variation, and the bank’s performance was measured as return on assets and return on equity. The frequency of directors’ meetings was used as a proxy for the effectiveness of TMT meetings. Findings Based on the hierarchical regression analysis, the results do not support the hypothesis that there is a negative influence between age diversity on performance. However, the results support the hypothesis that age diversity has a positive effect on performance because of the high effectiveness of TMT meetings. Research limitations/implications The limitations of the study include the use of only samples of the banks registered with Bank Indonesia. The subsequent research could use cross-country bank samples. In addition, the research uses age-related diversity variables only. Therefore, further research could consider other types of diversity such as education, functional or tenure. Furthermore, this study is limited to the effectiveness of the director (TMT) meetings as the only moderating variable. Further research could improve on this by including other moderating variables. Practical implications The findings of this study indicate that the existence of age diversity in TMT will aid bank governance if it is accompanied by effective meetings among groups of directors of varying ages. This age composition of directors will make meetings more effective as rich information for strategic decisions will be generated from different points of view because of the wide spectrum of age categories, and hence, there will be a positive impact on bank performance. Social implications This study indicates that effective meetings of TMT groups of different ages will minimize the rise of “self-esteem”. Therefore, they will benefit the creation of a better quality relationship among TMT individuals. Accordingly, TMT within a company will have more opportunities to discuss in providing bright ideas for the company on how to innovate and create a new strategy to improve its performance. Originality/value This study, being the first to explore the effectiveness of TMT meetings to bank performance in the contexts of directors’ age diversity, contributes to the literature in this area, and especially to the body of knowledge about companies implementing a two-tier governance system.

Corporate governance, financial crises and bank performance: lessons from top Russian banks

2016 ◽  
Vol 16 (5) ◽  
pp. 798-814 ◽  
Author(s):  
Nurlan Orazalin ◽  
Monowar Mahmood ◽  
Keun Jung Lee
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Financial Crises ◽  
Positive Impact ◽  
Operating Performance ◽  
Annual Reports ◽  
Bank Performance ◽  
Content Type ◽  
Governance Practices ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of different dimensions of corporate governance practices such as board characteristics, ownership structure, corporate disclosure and CEO education on the operating performance of Russian banks before, during and after financial crises. Based on the findings, it proposes some policy measures for improved governance practices to protect banks from future financial crisis or economic downturns. Design/methodology/approach The study comprises data from the largest publicly traded Russian banks listed on the Russian Stock Exchange RST for the period. Operating performance data were collected from financial statements, while corporate governance mechanisms were collected from annual reports available on the banks’ websites. Because panel data were used, the panel regression model was used to control unobserved time-constant heterogeneity. Findings The findings revealed a positive impact of corporate governance on bank performance before and after the financial crisis. The financial crisis enforced Russian banks to improve their corporate governance practices, resulting in better operating performance after the crisis. Surprisingly, the results for the during-crisis period show that better governance did not yield higher operating performance in Russian banks. Originality/value This is one of the first studies to provide empirical results regarding the relationship between corporate governance practices and bank performance in Russia across different financial crisis periods. The findings revealed the uniqueness of corporate governance scenarios of Russia which could provide important guidelines for other transition economies and emerging markets.

Are jacks-of-all-trades successful entrepreneurs? Revisiting Lazear's theory of entrepreneurship

2020 ◽  
Vol 15 (3) ◽  
pp. 411-430
Author(s):  
Agnieszka Kurczewska ◽  
Michał Mackiewicz
Keyword(s):  
Design Methodology ◽  
Success Factors ◽  
Negative Influence ◽  
The Body ◽  
Entrepreneurial Success ◽  
Content Type ◽  
Logit Regression ◽  
Managerial Experience ◽  
A Company

PurposeThe purpose of this paper is to identify human capital factors that pertain both to setting up and successfully running a business. To achieve this objective, the authors apply and extend the theory of career choice offered by Lazear (2005) that explains individual selection into entrepreneurship.Design/methodology/approachThe authors hypothesise that individuals with broader educational and professional backgrounds are more likely to start a business and are more likely to run a business in the long term. The authors tested the hypotheses using unique data from 800 current entrepreneurs, 800 employees who were previously entrepreneurs and 842 employees with no entrepreneurial experience, by means of a logit regression with robust standard errors and extensive robustness checks.FindingsThe authors empirically show that individuals with more diverse educational and professional backgrounds tend to have both greater chances of starting a company, as well as a higher probability of entrepreneurial success. Surprisingly, having managerial experience proved to exert a negative influence on the likelihood of starting a business while having an insignificant impact on the odds of entrepreneurial success.Research limitations/implicationsThe findings are informative for those planning or pursuing an entrepreneurial career, but they are also relevant for the purpose of entrepreneurship education.Originality/valueThe author's extend the body of research supporting Lazear's (2005) theory by showing that broad education and professional experience not only contribute to a higher propensity to start a company but they are also success factors in business per se.

Ethical values and bank performance: evidence from financial institutions in Malaysia

2020 ◽  
Vol 11 (1) ◽  
pp. 233-256
Author(s):  
Tuan Azma Fatiema Tuan Ibrahim ◽  
Hafiza Aishah Hashim ◽  
Akmalia Mohamad Ariff
Keyword(s):  
Banking Sector ◽  
Positive Association ◽  
Annual Reports ◽  
Bank Performance ◽  
Ethical Values ◽  
Return On Assets ◽  
Content Type ◽  
And Performance ◽  
The Relationship

Purpose The purpose of this study is to investigate the relationship between ethical values and performance in the context of the banking sector in Malaysia. Design/methodology/approach Based on the philanthropic model, this study posits that firms undertaking zakat and charity are ethical firms. Zakat disclosure index (ZDI) and charity disclosure index (CDI) were constructed to measure ethical values. This study hypothesises that ethical values are positively associated with bank performance. Ethical values (i.e. CDI and ZDI) and financial performance data (i.e. return on assets) were collected from the disclosures made in the annual reports of 50 banks for a period of five years (2010-2014). Findings A positive association was found between zakat disclosure and bank performance. The results indicate that higher zakat disclosure is associated with greater bank performance. However, no relationship was found between charity disclosure and bank performance. Research limitations/implications Considering the limitation of the index used in this study, other dimensions such as corporate governance, sustainability, products and environment can be considered in the development of index to measure ethical values in future studies. Originality/value This study offers additional explanation on the relationship between ethical values and performance by examining the role of zakat disclosures that characterize the unique aspects of Malaysian companies.

Cluster development policies and firms’ performance: evidence from an emerging economy in Latin America

2020 ◽  
Vol 12 (5) ◽  
pp. 687-726
Author(s):  
Diego Aboal ◽  
Marcelo Perera ◽  
Flavia Rovira
Keyword(s):  
Latin America ◽  
Impact Evaluation ◽  
State Of The Art ◽  
Positive Impact ◽  
Evaluation Methods ◽  
The Body ◽  
Maximum Effect ◽  
Content Type ◽  
Cluster Development ◽  
The Impact

Purpose Impact evaluations of cluster programs at firm level are still scarce in the literature. The available evidence on the effectiveness of such programs based on rigorous quantitative impact evaluations is mixed. The purpose of this paper is to contribute to the body of literature the evaluates quantitatively the impact of cluster programs in emerging economies on firms’ performance. In particular, the authors evaluate the impact of a cluster program in Uruguay on firms’ sales and exports. Design/methodology/approach The authors use state-of-the-art impact evaluation methods to evaluate the impact of the program. In particular, difference in differences and matching methods Findings There is very strong evidence that the program had a positive impact on exports and the propensity to export of firms. However, the evidence of a positive impact on sales is weak. The evidence suggests that the maximum effect of the program can be found in the fourth or fifth year after the intervention. Originality/value The contribution of this paper to the literature is fourfold. First, this paper adds to the scarce body of literature evaluating the effects of cluster development programs with state-of-the-art impact evaluation methods. Second, it adds evidence for Latin America, a region that has implement a number of cluster policies (Maffioli et al., 2016) and where, as far as the authors know, there is only one additional paper evaluating rigorously the impacts of them (Figal-Garone et al., 2015). In addition, the authors provide evidence about the timing of the effects after the implementation of a cluster policy, an important issue that is mostly overlooked in the existent literature. Finally, the paper focus its attention on the impacts on exports and the propensity to export of firms, key elements for small open economies in Latin America that are heavily reliant on foreign currency inflows.

scholarly journals Transmitting the entrepreneurial spirit to the work team in SMEs: the importance of leadership

2007 ◽  
Vol 45 (7) ◽  
pp. 1102-1122 ◽  
Author(s):  
Domingo Ribeiro Soriano ◽  
José Manuel Comeche Martínez
Keyword(s):  
Leadership Style ◽  
Latent Variables ◽  
Positive Impact ◽  
Negative Influence ◽  
Work Team ◽  
Content Type ◽  
Entrepreneurial Spirit ◽  
Collective Entrepreneurship ◽  
Entrepreneurial Activities ◽  
Practical Implications

PurposeTo establish the extent of the influence of variables which, under a particular style of leadership, form the necessary basis for encouraging and developing group, entrepreneurial activities carried out within the context of small to medium‐sized enterprises (SMEs) thus explaining the transmission of the entrepreneurial spirit to the work team and, consequently, the existence of collective entrepreneurship in the firm.Design/methodology/approachFrom the results of a questionnaire carried out via personal interviews with over 100 firms, a confirmatory factorial analysis was carried out that provided us with the variables to be studied. The cause/effect relationships and their implications were obtained from applying a LISREL8 analysis.FindingsA leadership based on relationships shows a positive impact, with an intensity of more than double that of participative leadership. A task‐oriented leadership style reduces the chances of transmitting the entrepreneurial spirit to the work team by having a negative influence on the generation of collective entrepreneurship in the firm.Research limitations/implicationsThe models contain the relations of “causality” between these latent variables, assuming that the variables observed therein are indicators or symptoms of those other variables. This could be considered as a limitation to our analysis as the study of covariance.Practical implicationsThe model has important applications for the process of incorporating new CEOs into the organization.Originality/valueThis paper presents confirmation of the need for aspects traditionally associated with the figure of the entrepreneur to be transmitted to the organization's collective as a whole and for the existence of collective entrepreneurship: an area of management that has thus far received relatively little attention and which could have important practical implications.

Factors affecting tender price in the Ghanaian construction industry

2017 ◽  
Vol 22 (3) ◽  
pp. 252-268 ◽  
Author(s):  
Ernest Kissi ◽  
Theophilus Adjei-Kumi ◽  
Edward Badu ◽  
Emmanuel Bannor Boateng
Keyword(s):  
Construction Industry ◽  
Structural Equation ◽  
Construction Projects ◽  
Negative Influence ◽  
Positive Influence ◽  
The Body ◽  
Content Type ◽  
Factors Affecting ◽  
Practical Implications ◽  
Structured Questionnaire

Purpose Tender price remains an imperative parameter for clients in deciding whether to invest in a construction project, and it serves as a basis for tender price index (TPI) manipulations. This paper aims to examine the factors affecting tender price in the construction industry. Design/methodology/approach Based on the literature review, nine independent constructs and one dependent construct relating to tender pricing were identified. A structured questionnaire survey was conducted among quantity surveyors in Ghana. Partial least squares structural equation modelling (PLS-SEM) examined the influences of various constructs on tender price development (TPD) and the relationships among TPD and TPI. Findings Results showed that cultural attributes, client attributes, contractor attributes; contract procedures and procurement methods; consultant and design team; external factors and market conditions; project attributes; sustainable and technological attributes; and TPI have a positive influence on tender price, whereas fraudulent attributes exert a negative influence. Practical implications The findings offer construction professionals broader understanding of factors that affect tender pricing. The results may be used in professional decision-making in the pricing of construction projects, as they offer clearer causal relations between how each construct will influence pricing. Originality/value This study adds to the body of construction pricing knowledge by establishing the relationships and degree of influences of various factors on tender price. These findings provide a valuable reference for practitioners.

Internal control quality and voluntary disclosure: does CEO duality matter?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hichem Khlif ◽  
Khaled Samaha ◽  
Ines Amara
Keyword(s):  
Internal Control ◽  
Voluntary Disclosure ◽  
Positive Impact ◽  
Emerging Market ◽  
Annual Reports ◽  
Structural Power ◽  
Ceo Duality ◽  
Content Type ◽  
Corporate Reporting ◽  
Control Quality

PurposeThe authors examine the association between internal control quality (ICQ) and voluntary disclosure and test whether chief executive officer (CEO) duality, as a proxy for CEO structural power, moderates such a relationship in an emerging market (Egypt).Design/methodology/approachICQ is measured using a survey of external auditors, while a content analysis approach is used to measure the level of voluntary disclosure in annual reports.FindingsBased on a sample of 512 firm-year observations over the period of 2007–2014, the authors document that ICQ is positively and significantly associated with voluntary disclosure, suggesting that better controls improve corporate reporting policy. In addition, CEO duality moderates the association between ICQ and voluntary disclosure since this positive relationship association becomes insignificant for companies characterised by CEO duality. These results remain stable after controlling for endogeneity (self-selection problem), political instability and industry characteristics.Research limitations/implicationsThe findings of the study provide preliminary evidence on the association between ICQ and voluntary disclosure, and how CEO structural power may affect this association. Future empirical investigations may extend this work to cover the relationship between ICQ and other attributes of corporate transparency including earnings quality and accounting conservatism.Practical implicationsThe findings highlight the need for Egyptian regulators to enact new rules obliging firms to communicate information about ICQ or charging auditors to report information about firm's ICQ in their reports. The results also alert policymakers about the adverse effect of combined leadership structure (CEO duality) since it mitigates the positive impact of ICQ on voluntary disclosure.Originality/valueThe authors contribute to internal control literature by exploring the association between ICQ and voluntary disclosure on an emergent unregulated market with respect to internal control disclosure. They also highlight how CEO duality, as a proxy for CEO power, mitigates the beneficial effect of ICQ on corporate reporting policy on the Egyptian stock exchange (EGX).

scholarly journals Bank Mergers Performance and the Determinants of Singaporean Banks’ Efficiency: An Application of Two-Stage Banking Models

2007 ◽  
Vol 9 (1) ◽  
pp. 19 ◽  
Author(s):  
Fadzlan Sufian ◽  
Muhamed-Zulkhibri Abd. Majid
Keyword(s):  
Banking Sector ◽  
Positive Impact ◽  
Negative Influence ◽  
Scale Efficiency ◽  
Bank Performance ◽  
Tobit Regression ◽  
Bank Efficiency ◽  
Factors Affecting ◽  
Overall Efficiency ◽  
Loan Quality

An event study window analysis of Data Envelopment Analysis (DEA) is employed in this study to investigate the effect of mergers and acquisitions on Singaporean domestic banking groups’ efficiency. The results suggest that the mergers have resulted in a higher post-merger mean overall efficiency of Singaporean banking groups. However, from the scale efficiency perspective, our findings do not support further consolidation in the Singaporean banking sector. We find mixed evidence of the efficiency characteristics of the acquirers and targets banks. Hence, the findings do not fully support the hypothesis that a more (less) efficient bank becomes the acquirer (target). In most cases, our results further confirm the hypothesis that the acquiring bank’s mean overall efficiency improves (deteriorates) post-merger resulted from the merger with a more (less) efficient bank. Tobit regression model is employed to determine factors affecting bank performance, and the results suggest that bank profitability has a significantly positive impact on bank efficiency, whereas poor loan quality has a significantly negative influence on bank performance.

scholarly journals Empirically examining the impact of corporate social responsibility on financial performance: evidence from Indian steel industry

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nripinder Kaur ◽  
Vikramjit Singh
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Steel Industry ◽  
Positive Impact ◽  
Value Added ◽  
Annual Reports ◽  
Content Type ◽  
Corporate Social ◽  
The Impact

PurposeThis paper aims to examine the impact of corporate social responsibility (CSR) on financial performance (FP) of Indian steel industry in terms of value-added (VAM), profitability (PM), market (MM) and growth measures (GM).Design/methodology/approachIt is an empirical study using secondary data of 40 companies for 14 years collected from CSR/annual reports/official websites of the companies and Prowess database. The panel regression analysis, MANOVA and univariate ANOVA have been conducted to examine the impact of CSR on FP.FindingsThe result indicates a positive impact of CSR on FP in terms of VAM, PM and GM, thereby indicating that more investments in CSR will generate wealth for shareholders, enhance profitability and sales. Moreover, this study shows no noticeable relationship between CSR and MM.Social implicationsThis study contributes to the literature on the CSR–FP relationship and also has implications for managers, investors and other stakeholders. Companies with higher CSR rating create a brand image, attract proficient employees, get greater profit, loyal customers and have less possibility of bribery and corruption. This study may result in being influential to companies confined not only to this sector but also reaching to the others, thus inspiring them to contribute their share of profit for the welfare of society.Originality/valueTo the best of the authors' knowledge, it is the first comprehensive study to examine the impact of CSR on FP of Indian steel industry by considering four dimensions for measuring FP. It provides evidence about the relationship between CSR and FP.

scholarly journals The association between intellectual capital and financial performance in the Islamic banking industry

2019 ◽  
Vol 13 (1) ◽  
pp. 75-93 ◽  
Author(s):  
A.A. Ousama ◽  
Helmi Hammami ◽  
Mustafa Abdulkarim
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Impact ◽  
Value Added ◽  
Annual Reports ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Gcc Countries ◽  
The Impact

Purpose The purpose of this study is to empirically investigate the impact of intellectual capital (IC) on the financial performance of Islamic banks operating in the Gulf Cooperation Council (GCC) countries. Design/methodology/approach The study measures IC by the value added intellectual coefficient model. A regression analysis was used to assess the impact of IC on financial performance. The research sample consisted of Islamic banks operating in the GCC countries during the years 2011, 2012 and 2013. Data originated from the annual reports of Islamic banks. Findings The results support the thesis that IC has a positive impact on the financial performance of Islamic banks. Even though the average IC is lower than that reported in other studies, the positive effect on financial performance is obvious. The findings also show that human capital (HC) is higher than capital employed (CE) and structural capital (SC). The study reveals that SC has an insignificant impact on the financial performance of the Islamic banks compared to CE and HC. Practical implications The findings provide empirical evidence that IC affects the Islamic banks’ financial performance. It helps Islamic banks in the GCC countries to understand how to use their IC efficiently, especially SC as it is yet to be used efficiently. Also, the findings benefit the relevant authorities (e.g. legislators and central banks) who could use them to emphasise strategic policy reforms whenever required. Originality/value The current research adds to the empirical studies in the GCC countries as it views the region as a collective as opposed to individual countries. It also extends the IC and performance measurement literature of Islamic banks in the GCC countries. Moreover, the current study enriches the limited literature on IC in the context of Islamic banking.

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