scholarly journals Impact of Agency Costs on Firm Performance: Evidence from Vietnam

2019 ◽  
Vol 10 (2) ◽  
pp. 294-309
Author(s):  
Le Duc Hoang ◽  
Tran Minh Tuan ◽  
Pham Van Tue Nha ◽  
Pham Van Tue Nha ◽  
Ta Thu Phuong
Keyword(s):  
Firm Performance ◽  
Instrumental Variables ◽  
Agency Costs ◽  
Negative Impact ◽  
Listed Companies ◽  
Econometric Models ◽  
Method Of Moment ◽  
Generalized Method Of Moment ◽  
The Impact

An assumption in agency costs theory is that agency costs can exert a negative impact on firm performance. In this study, we examine the impact of agency costs on firm performance of Vietnamese listed companies. Our sample includes 736 companies in Vietnam during the period om 2010 to 2015. We find that agency costs exert a negative impact on firm performance. Our results are robust to alternative econometric models, including an instrumental variables technique and a system generalized method of moment model. In addition, we show that a debt instrument can be a useful tool to reduce the negative impact of agency costs on firm performance.

The impact of free cash flows and agency costs on firm performance — An empirical analysis of KSE listed companies of Pakistan

2014 ◽  
Vol 01 (03) ◽  
pp. 1450027 ◽  
Author(s):  
Waqas Bin Khidmat ◽  
Mobeen Ur Rehman
Keyword(s):  
Firm Performance ◽  
Agency Costs ◽  
Negative Impact ◽  
Positive Impact ◽  
Balance Sheet ◽  
Listed Companies ◽  
Cash Flows ◽  
Agency Cost ◽  
Free Cash Flows ◽  
The Impact

The purpose of this research is to find out the impact of free cash flows and agency costs on firm performance in KSE listed companies of Pakistan. A sample of 123 companies listed on KSE representing eight different sectors has been analyzed to determine the association of free cash flows, agency costs and firm performance with each other. For the purpose of analysis, secondary data of selected companies for the period 2003–2009 has been taken from balance sheet analysis of joint stock companies (BSA) issued by State Bank of Pakistan (SBP). Free cash flows have been calculated as by Poulsen (1993) and Lang et al. (1991) while four proxy variables for agency costs are used (Wang, 2010) to assess their relationship with each other and with the firm performance. Results showed that there is a significantly positive relationship between free cash flows and agency cost. Free cash flows have significantly negative impacts on firm performance. The study also shows a significantly negative impact of agency cost on firm performance with exception to total asset turnover (TATO) ratio which has a positive impact. In Pakistani context, the minority shareholders are exploited by the majority shareholders and the management so the government with the help of this study can devise such rules of corporate governance in which the agency cost can be controlled. The investors also are benefitted from this study as they can efficiently manage their portfolio while looking at the impacts of agency costs and firms free cash flows. So this study enables us to better understand the linkage between agency cost, free cash flows and performance measures.

scholarly journals Effects of working capital management on firm performance and firm value – A study of the fisheries industry in Vietnam

2020 ◽  
Vol 7 (2) ◽  
Author(s):  
Vo Thi Quy ◽  
Le Thi Minh Nguyen
Keyword(s):  
Firm Performance ◽  
Firm Value ◽  
Negative Impact ◽  
Positive Impact ◽  
Method Of Moment ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Generalized Method Of Moment

This research investigates the effects of working capital management through cash conversion cycle and its components (average receivable days - ARD, average inventory days – AID, and average payable days - APD), along with the effects of the working capital management policies on firm performance and firm value in the fisheries industry. Generalized Method of Moment (GMM) was applied with the data collected from 21 fisheries companies listed on Vietnam's stock market in the period 2008 -2012. The research found that the cash conversion cycle, average receivable days, average inventory days, and average payable days have a negative impact on firm performance (ROA) and firm value (Tobin'Q). The research results also showed that aggressive working capital policy has a negative impact, but the conservative working capital policy has a positive impact on firm performance and firm value of fisheries selected companies.

scholarly journals Openness and Inflation Volatility: A Case Study SAARC Country

2020 ◽  
Vol 6 (4) ◽  
pp. 1051-1058
Author(s):  
Huma Johar ◽  
Nadeem Iqbal ◽  
Alishba Asif
Keyword(s):  
Negative Impact ◽  
Positive Impact ◽  
Commodity Price ◽  
Method Of Moment ◽  
Inflation Volatility ◽  
Long Run ◽  
Time Period ◽  
Short Run ◽  
Generalized Method Of Moment ◽  
The Impact

The objective of this research paper is to check the impact of openness on inflation volatility. The time period ranges from 1986-2014 by utilizing Panel data for SAARC countries. Four proxy variables are used to calculate openness by using Generalized Method of Moment (GMM) and Impulse Response for the existence of short run and long run relationship. GMM results indicates that the relation depend on the proxy variable being used in the model. Export to GDP and KOF index shows negative impact on inflation volatility while Trade to GDP ratio has significant positive impact on inflation volatility. The empirical study suggests that exports should be encouraged as it resulted in decreasing rate of inflation as along with imports inflation is also imported in terms of commodity price.                          

scholarly journals Environmental, Social, Governance Activities and Firm Performance: Evidence from China

2021 ◽  
Vol 13 (2) ◽  
pp. 767
Author(s):  
Lei Ruan ◽  
Heng Liu
Keyword(s):  
Firm Performance ◽  
Emerging Markets ◽  
Negative Impact ◽  
Listed Companies ◽  
Regulatory Agencies ◽  
Rating Data ◽  
Social Governance ◽  
Environmentally Sensitive ◽  
Regulatory Measures ◽  
A Share

Increasingly noticeable environmental and risk problems have made more and more companies and regulatory agencies realize the importance of environmental, social, and governance (ESG) activities. However, on the question that whether ESG activities have promoted or reduced firm performance, there is still no consensus. Especially for China, a representative country in emerging markets whose corporate ESG activities are still in their infancy and related systems and regulatory measures not complete, its theoretical and practical circles more urgently need to know an accurate answer to this question. Therefore, this article takes China’s Shanghai and Shenzhen A-share listed companies that have ESG rating data from 2015 to 2019 as samples and finds that corporate ESG activities have a significantly negative impact on firm performance. Further research finds that compared with state-owned enterprises and environmentally sensitive enterprises, non-state-owned enterprises and non-environmentally sensitive enterprises provide stronger evidence to support the above conclusions.

scholarly journals Econometric models for estimating current and forecast values of the level of human capital development in the Russian economy

2020 ◽  
Vol 26 (1) ◽  
pp. 52-67
Author(s):  
Nina Baranova ◽  
Sergey Larin ◽  
Evgeny Khrustalyov
Keyword(s):  
Human Capital ◽  
Economic Development ◽  
Negative Impact ◽  
Import Substitution ◽  
Econometric Models ◽  
Practical Significance ◽  
Human Capital Development ◽  
Russian Economy ◽  
Capital Development ◽  
The Impact

Studies of factors of sustainable economic development in modern conditions are highly relevant for Russia due to the constant increase and tightening of sanctions restrictions. They have a negative impact on the introduction of innovative developments and economic growth, and reduce the competitiveness of Russian enterprises and their products on world markets. Human capital can become one of the key factors for countering sanctions restrictions, improving the efficiency of economic development and gaining additional competitive advantages for domestic enterprises and the economy as a whole. Assessing the impact of human capital on the sustainable development of the economy is difficult, since it is one of the specific forms of capital. When making appropriate measurements, economic scientists rely on a number of developed theoretical methods and practical tools that support them, which allow us to obtain fairly accurate values of the human capital development index (HDI) based on statistical data. First of all, this is the current UN methodology for calculating the HDI indicator, as well as modern software systems OriginPro-8.6 and Eviews-10.0, which have sufficiently advanced functionality for performing calculations. Russia today has all the necessary prerequisites and opportunities for progressive social and economic development. However, the formation of econometric models will help to timely determine the current and forecast values of the level of human capital development for individual enterprises, industries, and the country’s economy as a whole. This paper shows the practical application of the econometric tools of all the above approaches to obtain the calculated values of the HDI indicator for different time periods and different scenarios for the development of the Russian economy. The results obtained confirmed the high practical significance of the tools used and the acceptable accuracy of the calculations. However, the current and forecast values of the level of human capital development alone will not be able to ensure the effective development of the Russian economy. On the contrary, the effective use of human capital in the implementation of import substitution strategies and national projects will allow our country to become one of the world’s leading economic development countries.

An empirical investigation on the impact of marketing strategy style on firm performance: evidence from public firms in China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rui Wang ◽  
Liqiong Liu ◽  
Yu Feng
Keyword(s):  
Marketing Strategy ◽  
Corporate Performance ◽  
Negative Impact ◽  
Secondary Data ◽  
Listed Companies ◽  
Research Issues ◽  
Content Type ◽  
Public Firms ◽  
Negative Effect ◽  
The Impact

PurposeThe mechanism of marketing strategy style and its impact on firms are research issues received wide attention. In particular, the aggressive style of marketing strategy has been chosen by many companies, but recent studies have shown that it has a negative effect on corporate performance. This leads to the core issue of this paper – does the aggressive style of marketing strategy always had a negative impact on corporate performance? Are there any factors that can alleviate this negative impact?Design/methodology/approachBased on the resource-based theory and agency theory, this paper takes the Growth Enterprise Market (GEM) listed companies as the research objects, collects secondary data and conducts the research by regression model.FindingsThe empirical research shows that: (1) the aggressive style of marketing strategy significantly and negatively affects the performance of firm; (2) the resource constraint can moderate the main effect and resource control play a weak adjustment role.Practical implicationsIn practice, this paper confirms the adverse impact of aggressive style of marketing strategy on the performance of listed companies on GEM and inspires the industry to strengthen the control and supervision of marketing resources.Originality/valueThis paper makes up for the research gap in the field of cross-research in finance and marketing theoretically.

scholarly journals The Effect of Board Diversity on Firm Performance: Evidence from Chinese L isted Companies

2020 ◽  
Vol 13 (1) ◽  
pp. 9-33
Author(s):  
Waqas Bin Khidmat ◽  
Muhammad Ayub Khan ◽  
Hashmat Ullah
Keyword(s):  
Firm Performance ◽  
Fixed Effects ◽  
Gender Diversity ◽  
Diversity Education ◽  
Method Of Moment ◽  
Fixed Effects Model ◽  
Foreign National ◽  
Board Diversity ◽  
Listed Firms ◽  
The Impact

Drawing on the upper echelon’s theory and the resource-based theory, the purpose of the study is to examine the impact of board diversity on the Chinese A-listed firm’s performance. The data were collected from A-listed companies registered in Shanghai SSE 180 and the Shenzhen 100 from the period 2007 to 2016. Since some of the companies got listed after 2007, our data is unbalanced. Both fixed effects model and a more robust dynamic panel generalised method of moment estimation are applied to cater the endogeneity problem. After controlling for several firms and board characteristics, we found gender diversity, education diversity and foreign national diversity measured through Blau index have a positive and significant effect on the Chinese A-listed firm performance for both the accounting and market measures. The age diversity and independence diversity seem not to be an essential determinant of firm performance in Chinese A-listed firms. The results supported the efficient monitoring hypothesis and managerial networking theory, which suggests that the director’s diversity reduces the managerial entrenchment on the one hand, while, through networking, increases the resources of the firms on the other side.

scholarly journals Does Water, Waste, and Energy Consumption Influence Firm Performance? Panel Data Evidence from S&P 500 Information Technology Sector

2020 ◽  
Vol 17 (14) ◽  
pp. 5206
Author(s):  
Liliana Nicoleta Simionescu ◽  
Ștefan Cristian Gherghina ◽  
Ziad Sheikha ◽  
Hiba Tawil
Keyword(s):  
Information Technology ◽  
Energy Consumption ◽  
Firm Performance ◽  
Panel Data ◽  
Negative Impact ◽  
Total Energy Consumption ◽  
Technology Sector ◽  
Information Technology Sector ◽  
The Impact ◽  
Water Waste

This paper aimed to investigate the impact of water, waste, and energy consumption on firm performance for a sample of enterprises that belong to the S&P 500 Information Technology sector over the period of 2009–2020. The quantitative framework covered both accounting (e.g., return on assets—ROA; return on common equity—ROE; return on capital—ROC; return on invested capital—ROIC) and market-based measures of performance (e.g., price-to-book value—PB), alongside firm and corporate governance specific variables. By estimating multivariate panel data regression models, the empirical results provided support for a negative impact of total water use on PB but a positive effect on ROA. With reference to the total waste, the econometric outcomes revealed a negative influence on the entire selected performance measures, whereas total energy consumption did not reveal any statistically significant influence.

scholarly journals Do Female Executives Make a Difference? The Impact of Female Leadership on Gender Gaps and Firm Performance

2019 ◽  
Vol 129 (622) ◽  
pp. 2390-2423 ◽  
Author(s):  
Luca Flabbi ◽  
Mario Macis ◽  
Andrea Moro ◽  
Fabiano Schivardi
Keyword(s):  
Firm Performance ◽  
Fixed Effects ◽  
Negative Impact ◽  
Positive Impact ◽  
Female Leadership ◽  
Wage Distribution ◽  
Female Executives ◽  
Female Workers ◽  
Fixed Effects Regression ◽  
The Impact

Abstract We investigate the effects of female executives on gender-specific wage distributions and firm performance. Female leadership has a positive impact at the top of the female wage distribution and a negative impact at the bottom. The impact of female leadership on firm performance increases with the share of female workers. We account for the endogeneity induced by non-random executives’ gender by including firm fixed-effects, by generating controls from a two-way fixed-effects regression and by using instruments based on regional trends. The findings are consistent with a model of statistical discrimination in which female executives are better at interpreting signals of productivity from female workers. This suggests substantial costs of women under-representation among executives.

scholarly journals Getting CFO on board – its impact on firm performance and earnings quality

2020 ◽  
Vol 33 (2) ◽  
pp. 435-454
Author(s):  
Lien Duong ◽  
John Evans ◽  
Thu Phuong Truong
Keyword(s):  
Firm Performance ◽  
Negative Impact ◽  
Earnings Quality ◽  
Least Square ◽  
Chief Financial Officers ◽  
Outside Directors ◽  
Content Type ◽  
Ordinary Least Square ◽  
Board Membership ◽  
The Impact

Purpose This paper aims to investigate the impact of Australian Chief Financial Officers (CFOs) as board insiders on firm performance and earnings quality with reference to agency theory and theory of friendly board. Design/methodology/approach The ordinary least square, two-stage least-squares and propensity score matching regressions are performed with various proxies for firm performance and accruals quality. Findings Firms with CFOs as board insiders experience significantly lower firm performance and earnings quality. In firms with powerful CEOs, the negative impact of CFO board membership on earnings quality is further magnified. Additionally, the negative impact of CFO board membership on firm values and earnings quality is only present in firms with bigger boards or firms with less outside directors. The findings are consistent with the agency perspective and in sharp contrast to the US market. Originality/value This is the first Australian study to examine the impact of CFO board membership on firm performance and earnings quality. The findings suggest that the monitoring of executives is best done by a small or independent board and that the insider board membership should be optimised.

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