scholarly journals Multiple performance pressure inconsistency, resource slack, and the firm’s R&D investment: A behavioral agency theory perspective

2020 ◽  
pp. 234094442091609
Author(s):  
David Diwei Lv ◽  
Weihong Chen ◽  
Hailin Lan
Keyword(s):  
Resource Allocation ◽  
Agency Theory ◽  
Jel Classification ◽  
Organizational Slack ◽  
Managerial Ownership ◽  
Performance Pressure ◽  
The Face ◽  
The Impact ◽  
D Investment ◽  
Behavioral Agency

In the process of operation, firms will face different types of performance pressure. The inconsistency among multiple performance pressure signals has an important impact on resource allocation and R&D investment. However, at present, studies on the impact of multiple performance pressures on the firm’s resource allocation and R&D investment are very limited, and few studies have analyzed the impact of inconsistencies among multiple performance pressure signals on the firm’s R&D investment. Given this research gap, this article empirically tested a model from the perspective of behavioral agency theory, in which inconsistency in long- and short-term performance pressure facilitates the accumulation of organizational slack. We further test the impact of an increase in organizational slack on the firms’ R&D investment intensity and find that this effect is stronger when the level of managerial ownership is comparatively low. These results together indicate that high inconsistency in performance pressure and low managerial ownership jointly facilitate the accumulation of organizational slack, enabling firms to go beyond local search and have more slack searches in the face of multiple performance pressure, which is conducive to an increase in R&D investment. JEL CLASSIFICATION: M10.

scholarly journals The Simultaneity of Corporate Financial Decisions Under Different Levels of Managerial Ownership: A Case of Pakistani Listed Firms

2019 ◽  
Vol 10 (2) ◽  
pp. 147
Author(s):  
Mohamad Helmi bin Hidthiir ◽  
Muhammad Farhan Basheer ◽  
Saira Ghulam Hassan
Keyword(s):  
Agency Theory ◽  
Random Effect ◽  
Order Theory ◽  
Managerial Ownership ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Financial Decisions ◽  
Listed Firms ◽  
Financing Decisions ◽  
The Impact

Purpose- The prime objective of the current study is to investigate the interdepended of financial decision. In addition to that the impact of different level of managerial ownership on the interdepended of financial decisions is also examined agency theory, pecking order theory and the signaling theory are used as the theoretical lenses to draw the theocratical framework.Design/methodology/approach- The balance panel of 161 nonfinancial firm over the period of five years from 2013 to 2017 is used to achieve the research objectives. Polled OLS, Fixed effect and Random effect estimates are employed to answer the reach questions Findings- The managerial ownership with an average mean ownership of 39 is appeared at the top. Interestingly more than 75 percent firms are being controlled by mangers and in more than 60 percent firms of our sample the controlling managers hold more than 40 percent of shares. The Wu Hausman test is performed to determine the existence of the endogeneity problem.  The results indicates that the financial decisions namely cash holding decisions, financing decisions and investment decisions has significant impact on each other. Where the managerial ownership is in nonlinear relationship with financial decisions. The results of the study are also providing support to agency theory, pecking order theory and the signaling theoryResearch implications- The study will be helpful for policymakers, researchers, corporate personals and financial institutions in understanding the interrelationship between financing decisions and the role of managerial ownership in there interdepended.Originality/value- The study is among the pioneering studies on the issue and will provide policy guideline on the said issues.

Market or government: who plays a decisive role in R&D resource allocation?

2019 ◽  
Vol 9 (1) ◽  
pp. 110-136 ◽  
Author(s):  
Shoufu Xu ◽  
Xuehui He ◽  
Longbing Xu
Keyword(s):  
Resource Allocation ◽  
Stock Prices ◽  
Government Intervention ◽  
Decisive Role ◽  
Market Mechanism ◽  
Market Valuation ◽  
Content Type ◽  
The Impact ◽  
The Relationship ◽  
D Investment

Purpose The purpose of this paper is to empirically investigate the impact of equity market valuation and government intervention on the research and development (R&D) investments of listed companies in China and their relationship. Design/methodology/approach Using a manually collected R&D database in the period 2007–2015, this paper constructs a sample of 6,595 firm–year observations and applies the methods of pooled OLS regressions to examine the effects of market valuation and government intervention on corporate R&D expenditures. Findings This paper finds that market valuation enhances corporate R&D investments, but there is no evidence that government intervention may significantly affect the R&D investments. Government intervention also decreases the sensitivity of corporate R&D investment to stock price, which implies that government intervention weakens the promotion of market mechanism to corporate R&D investment. Furthermore, these effects are stronger in the non-state-owned firms and the non-regulated industries. Practical implications This study suggests that the functional borders of markets and government should be reasonably defined and markets play a decisive role in resource allocation to improve corporate innovation and national innovation. Originality/value This paper provides a micro view of the relationship between market and government at the stage of transitional economy in China as well as directions for further research on the relationship between stock prices and corporate investments.

The sensitivity of corporate social performance to corporate financial performance: A “time-based” agency theory perspective

2020 ◽  
pp. 031289622091719
Author(s):  
Bum-Jin Park ◽  
Ki-Hoon Lee
Keyword(s):  
Financial Performance ◽  
Agency Theory ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Managerial Incentives ◽  
Jel Classification ◽  
Corporate Financial Performance ◽  
Managerial Ownership ◽  
Corporate Social

This study focuses on micro-level phenomena and time issues that have been traditionally neglected in both corporate governance and corporate social responsibility research. Drawing on agency theory concerning time-based managerial incentives (i.e. short term and long term), we investigate which managerial incentives for compensation drive the sensitivity of corporate social performance ( CSP) to corporate financial performance ( CFP). Using data for publicly listed Korean firms, we found a significant and positive relationship between CSP and CFP, with this relationship strengthened in firms with high managerial ownership but insignificant in those with high earnings-based compensation. Furthermore, we found that the interaction effects of CSP and high earnings-based compensation on CFP become positive in firms with high managerial ownership, indicating that the sensitivity between CSP and CFP is driven by long-term managerial incentives. JEL Classification: M12, M14, G35

scholarly journals Different board structures and R&D: Evidence from Japanese corporation

2015 ◽  
Vol 11 (2) ◽  
pp. 171-201
Author(s):  
Takahiro Nishi
Keyword(s):  
Corporate Governance ◽  
Panel Data ◽  
Agency Theory ◽  
Institutional Investors ◽  
Board Composition ◽  
Board Structure ◽  
Specific Relationship ◽  
The Impact ◽  
D Investment

This study examines the effect of different board style and ownership, and board composition on R&D investment in Japanese corporation. I explore how different board structure contribute to R&D investment in varied way and the impact of different type of governance on R&D investment incorporation. I analyze it with 2010-2014 panel data regarding Japanese corporate governance. I found that different type of corporate governance make impacts on R&D in corporations indicating the specific relationship between corporate governance and R&D, not explained by agency theory. This study observed that Board composed of insider avoid interference of institutional investors by caring about investor’s interests.

scholarly journals Analysing the Impact of Managerial Ownership on the Performance of Shariah-Compliant Firms in Pakistan

2018 ◽  
Vol 11 (11) ◽  
pp. 55 ◽  
Author(s):  
Naveeda K Katper ◽  
Sanober Salman Shaikh ◽  
Vivake Anand ◽  
Najma Imtiaz Ali
Keyword(s):  
Firm Performance ◽  
Agency Theory ◽  
Random Effect ◽  
Agency Cost ◽  
The Body ◽  
Muslim World ◽  
Managerial Ownership ◽  
Strong Impact ◽  
The Impact ◽  
Retained Earnings

This paper analyses the impact of managerial ownership upon firm performance in the Shariah-compliant firms of Pakistan. Agency theory that suggests involving managers as part of firm's ownership can help firms reduce the agency cost, has widely been applied in the corporate setup of conventional finance, however, there is growing need of academic research to find out the role and application of this theory in the Shariah-compliant organizations. All around the Muslim world, there is the rise of Shariah-compliant firms; however, little work has been done to critically evaluate such important concepts based on agency theory, it is, therefore, an optimistic approach to familiarise the idea of firm performance with the relationship of managerial ownership under Agency Theory in such organizations. In order to better understand the acceptability and adaptability of Agency Theory, the objective of this study is to examine the impact of managerial ownership upon firm performance in Shariah-compliant firms of Pakistan for the first time. This paper is based upon panel data and regression models applied to the sample of 68 Shariah-compliant firms listed on Pakistan’s Karachi Stock Exchange covering five years from 2009 to 2013. This paper tests the firm performance through two different dependent variables Tobin’s Q and ROA by regressing through OLS, Fixed effect (FE) and Random effect(RE) methods. Both models are proved empirically significant. The robust results confirm that managerial ownership (MO) has a positive and strong impact upon firm performance (Q)/ (ROA) in the Shariah-compliant firms of Pakistan. The outcomes may provide a good understanding and help in making a better decision regarding investment on the ethical grounds. It proves that more concentrated managerial ownership produces the higher firm profits. It can be also inferred that the increased proportion of managerial ownership tends to align with the interests of owners and thus help to reduce the agency conflict in our sample of Shariah-compliant firms in Pakistan. Moreover, Size (LNTA) has a positive relationship with firm performance (Q)/ (ROA) viewing that the Shariah-compliant firms depend on retained earnings. It may be due to the restricted criterion on the leverage for Shariah-compliant firms by the board of Shariah compliance. Leverage (DAR) is negatively and significantly correlated with profitability and growth (GROW) is positively and significantly correlated with firm performance (Q). In the developing and Muslim world, this study may reserve a unique place due to its virgin attempt and highlight the ignored aspect in the body of literature. These findings are of great benefit to investment managers, and Shariah cautious and other ethical investors regarding investment and portfolio related decisions.

scholarly journals IJV’s political ties and R&D strategy: Asymmetric contingencies of market versus governmental policy turbulence

2020 ◽  
pp. 234094442097785
Author(s):  
Jie Yang ◽  
Jieqiong Ma ◽  
D Harold Doty ◽  
Jeoung Yul Lee
Keyword(s):  
Jel Classification ◽  
International Joint Ventures ◽  
Governmental Policy ◽  
Political Ties ◽  
Market Turbulence ◽  
Contingency View ◽  
Investment In China ◽  
The Impact ◽  
The Relationship ◽  
D Investment

The purpose of this article is to empirically explore (1) the impact of political ties on international joint ventures’ (IJVs) R&D strategy and (2) the moderating effects of market turbulence and governmental policy turbulence on the relationship between IJV political ties and R&D investment in China. Our sample consists of 1,344 observations taken from 224 IJVs over a period of 6 years (2012–2017), and we applied hierarchical moderated regression analysis (HMRA) with panel data to analyze our three hypotheses. Our findings show that IJVs with political ties tend to invest more in R&D than their counterparts without political ties. Interestingly, this positive relationship grows stronger with high market turbulence, but wanes under high governmental policy turbulence. While the issues regarding the importance of political ties to IJVs competing in China have been discussed, the issues related to why political ties influence IJV’s decisions on R&D investment have been largely overlooked. Hence, this study applies the environmental contingency view to fill this gap and shows how asymmetric contingencies for market turbulence and governmental policy turbulence occur in this context. JEL CLASSIFICATION: M1

Computers in Medical Care: A Review

1984 ◽  
Vol 23 (02) ◽  
pp. 63-74 ◽  
Author(s):  
Hans W. Gottinger
Keyword(s):  
Resource Allocation ◽  
Medical Care ◽  
Hospital Care ◽  
The Impact

SummaryThis survey provides an overview of major developments on the impact of computers in medical and hospital care over the last 25 years. Though the review emphasizes developments in the U. S. and their multi-faceted impacts upon resource allocation and regulation, a serious attempt is made to track those impacts being universally true in multinational environments.

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