scholarly journals Does frequent leadership changes influence firm performance? Insights from China

2021 ◽  
Vol 10 (3) ◽  
pp. 291-298 ◽  
Author(s):  
Ahsan Akbar ◽  
Xinfeng Jiang ◽  
Zeeshan Fareed ◽  
Minhas Akbar
Keyword(s):  
Firm Performance ◽  
Performance Indicators ◽  
Listed Firms ◽  
Impact Performance ◽  
Ceo Tenure ◽  
Effect Regression ◽  
Performance Decline ◽  
Leadership Changes ◽  
One Year ◽  
The Relationship

This letter is a first attempt to investigate the relationship between frequent leadership changes during the year and firm performance. We analyze how CEO frequency during one-year period impact performance indicators of Chinese listed firms. The results of panel fixed-effect regression reveal that CEO turnover leads to a decline in corporate performance measured by ROA and ROE. Moreover, with an increase in annual turnover frequency, the degree of performance decline gets more pronounced. These results remain robust after controlling for endogeneity using the alternate econometric specification of 2SLS. The study findings assert that frequent CEO changes are not conducive to firm performance. Hence, stability in the CEO tenure is essential to sustain and optimize financial performance of an enterprise.

scholarly journals The relationship between intellectual capital and firm performance

2017 ◽  
Vol 1 (1) ◽  
pp. 32-41 ◽  
Author(s):  
Amina Mohamed Buallay
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
High Performance ◽  
Positive Impact ◽  
Stock Exchange ◽  
Random Effect ◽  
Listed Firms ◽  
Effect Regression ◽  
The Impact ◽  
The Relationship

This study aimed to measure the impact of intellectual capital on firm performance of listed firms in Saudi stock exchange. The study methodology was a pooled data collected from the Saudi stock exchange (TADAUWL) for the period from 2012 to 2014. The study sample is 489 observations from 171 listed firms. The study independent variable is Intellectual Capital components (HCE, SCE and CEE). The dependent variable is firm performance which measured using ROA, ROE and Tobin’s Q. The study also utilized five control variables in order to help measure the relationship between Intellectual Capital and Firm Performance. In conclusion, the study found that the Intellectual Capital level tends to be higher with firms that have high performance. However, there is variation in the level across the sectors. Random effect regression model was incorporated; the results revealed that there is no significant impact of Intellectual Capital on firm’s operational performance (ROA). However, there is the significant positive impact of Human capital on financial performance (ROE). Additionally, the study concluded that there is the negative significant impact on structural capital efficiency and positive significant impact on Capital Employed Efficiency on firms’ market performance (TQ). These results are expected to broaden the understanding of IC and its impact on firms’ performance in GCC economies in general and specifically in Saudi economic. Moreover, it will be useful for GCC firms to place their priorities and financial plans for effective and efficient use of Intellectual Capital.

scholarly journals Examining the Relationship Between Enterprise Risk Management and Firm Performance in Malaysia

2019 ◽  
Vol 10 (3) ◽  
pp. 239
Author(s):  
Mazurina Mohd Ali ◽  
Nur Shazwani Ab Hamid ◽  
Erlane K Ghani
Keyword(s):  
Risk Management ◽  
Firm Performance ◽  
Enterprise Risk Management ◽  
Audit Firm ◽  
Listed Firms ◽  
Significant Coefficient ◽  
Enterprise Risk ◽  
Before And After ◽  
The Mean ◽  
The Relationship

This study aims to examine the relationship between enterprise risk management (ERM) implementation and firm performance in Malaysia. Using the sample from 2010 to 2016, this study examines the relationship between ERM and firm performance among Malaysian top 100 public listed firms registered on the Index FTSE Bursa Malaysia 100 (FBM100) KLSE. This study also provides comparisons before and after the introduction of Bursa Malaysia Guidelines 2013. This study shows a positive and significant coefficient between profitability and firm performance towards ERM implementation. However, this study shows insignificant relationship between firm size, financial leverage and audit firm with firm performance. This study also shows that there is an increase in the mean score and standard deviation of these variables after the implementation of Bursa Malaysia Guideline 2013. The findings in this study provides an understanding to the Malaysian public listed firms on the importance of ERM and subsequently, maximise the benefits of ERM especially after the introduction of Bursa Malaysia Guidelines 2013 for the benefits of their stakeholders and regulatory improvement in future.

scholarly journals Capital Structure and Firm Performance in Nigerian-Listed Companies

2016 ◽  
Vol 8 (3(J)) ◽  
pp. 54-74 ◽  
Author(s):  
Matthew Adeolu Abata ◽  
Stephen Oseko Migiro
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Negative Relationship ◽  
Debt Financing ◽  
Descriptive Statistics ◽  
The Other ◽  
Listed Firms ◽  
Business Failures ◽  
The Relationship

a number of business failures have not been reported in Nigeria arising from inability to payback nor does service debts .This paper empirically investigate the relationship between capital structure and firm performance in the Nigerian listed firms. A sample of 30listed firms out of a population of 173 were examined from 2005 to 2014 using multiple regression tools. Two hypotheses were formulated and tested using descriptive statistics and an econometric panel data technique to analyze the gathered data. An insignificantly negative correlation was found between financial leverage and ROA on one hand and a significantly negative relationship between debt/equity mix and ROE on the other hand. It is therefore recommended that firms should use long term liabilities to finance firm’s activities and mix debt/equity appropriately by ensuring that debt financing ratio is lower to enhance corporate performance and survival.

Relationship between Corporate Governance Index and Firm Performance: Indian Evidence

2018 ◽  
Vol 19 (3) ◽  
pp. 675-689 ◽  
Author(s):  
Akshita Arora ◽  
Shernaz Bodhanwala
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Performance Metrics ◽  
Market Competition ◽  
Board Structure ◽  
Data Set ◽  
Listed Firms ◽  
Market For Corporate Control ◽  
Governance Index ◽  
The Relationship

The Indian corporate governance norms have been evolving over a period of time but limited number of studies have been undertaken with reference to corporate governance index (CGI) in the Indian context. The study aims to examine the relationship between CGI and firm performance. We construct CGI using important parameters of governance such as board structure, ownership structure, market for corporate control and market competition. Our panel data set comprises of listed firms and the estimation analysis has been carried out using random effects method. The study reveals significant positive relationship between CGI and firm performance metrics. CGI is an important and causal factor in explaining firm performance. The investors would also have positive perception about business firms maintaining high governance standards, thus reducing possible funding costs.

scholarly journals Firm Performance and Business Cycles: Implications for Managerial Accountability

2015 ◽  
Vol 1 (1) ◽  
pp. 47
Author(s):  
Fabio Yoshio Suguri Motoki ◽  
Carlos Enrique Carrasco Gutierrez
Keyword(s):  
Firm Performance ◽  
Business Cycles ◽  
Listed Firms ◽  
Novel Approach ◽  
Compensation Packages ◽  
Performance Results ◽  
The Relationship ◽  
Measures Of Performance

This study explores the relationship between firm performance and business cycles. These cycles are deviations from the trend of an economy-wide variable, in our case, GDP. Using a sample of Brazilian listed firms and accounting measures of performance, we find a generally positive contemporaneous relationship between the cycle and firm performance. Results also indicate that different industries show distinct relationships. This research presents a novel approach by linking firm performance from several industries to business cycles, indicating that managerial effort may be less determinant of firm performance than what is generally accepted. Our findings have potential implications for the design of more efficient compensation packages and to the study of managerial self-attributed performance.

scholarly journals Can Family Ownership Strengthen the Relationship Between Intellectual Capital and Performance in ASEAN High-Tech Firms?

2021 ◽  
Vol 22 (3) ◽  
pp. 1102-1122
Author(s):  
Bima Cinintya Pratama ◽  
Maulida Nurul Innayah
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Random Effect ◽  
Market Performance ◽  
High Tech ◽  
Family Ownership ◽  
Effect Regression ◽  
The Relationship

This study investigates the positive relationship between intellectual capital and firm performance. It examines whether family ownership can strengthen the relationship between intellectual capital and firm performance of firms in high-technology industries in ASEAN. The data was collected from the BvD OSIRIS database and company annual reports from 2008-2014 and conducted on five countries in ASEAN, namely Indonesia, Malaysia, Philippines, Singapore, and Thailand. The final sample used in this study consists of a total of 1,310 observations. This study uses panel data regression model analysis, i.e. fixed effect regression and random effect regression. The results showed that intellectual capital has a positive relationship with financial performance. The result proved the role of intellectual capital in increasing firm finances and its importance as one of the primary resources in competing in the AEC challenges and as the firm's primary driver for the firm's success. It is not found in the relationship between intellectual capital and market performance. In the interaction relationship, the result is contrary to the alignment effect that becomes our previous prediction. The result is consistent with the entrenchment effect and indicates that family ownership can weaken the relationship between intellectual capital and financial performance. There is no evidence about the relationship between the interaction of intellectual capital and family ownership on market performance.

Board independence and firm performance: evidence from Kuwait

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mejbel Al-Saidi
Keyword(s):  
Firm Performance ◽  
Least Square ◽  
Independent Directors ◽  
Board Independence ◽  
Content Type ◽  
Listed Firms ◽  
Ordinary Least Square ◽  
Large Shareholders ◽  
The Relationship

Purpose This paper aims to reduce the knowledge gap by using a large sample and different regressions while controlling the endogeneity and causality issues. Design/methodology/approach This study used the ordinary least square (OLS) and two stage least squares (2SLS) regressions to control the endogeneity and causality problems; this estimation strategy allows for comparison of both estimates to identify any inconsistency and biases in the parameters. Findings General speaking, this study found that board independence negatively affected firm performance based on Tobin’s Q only and the relationship between the two variables ran from board independence to firm performance but not vice versa. Originality/value The current independent directors are not adding value to Kuwait’s listed firms. Some directors who represent large shareholders and the conflict between large shareholders and small shareholders could affect the role of independent directors in Kuwait. To best of the researchers’ knowledge, this study is the first to consider board independent after controlling the issues of endogeneity and causality in Kuwait; thus, the results could be useful for Kuwaiti firms, regulators and policymakers.

Dynamic study of corporate governance structure and firm performance in China

2019 ◽  
Vol 13 (2) ◽  
pp. 299-317 ◽  
Author(s):  
Lin Shao
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Generalized Method Of Moments ◽  
Supervisory Board ◽  
Governance Structure ◽  
State Ownership ◽  
Content Type ◽  
Listed Firms ◽  
The Impact ◽  
The Relationship

Purpose The paper aims to provide a comprehensive investigation of the relationship between corporate governance (CG) structure and firm performance in Chinese listed firms from 2001 to 2015. The authors’ motivation derives from the fact that the CG system in China is different from those in the US, the UK, Germany, Japan and other countries. Design/methodology/approach A large unbalanced sample, covering more than 22,700 observations in Chinese listed firms, was used to explore, by means of a system-generalized method-of-moments (GMM) estimator, the relationship between CG structure and firm performance to remove potential sources of endogeneity. Findings Results show that Chinese CG structure is endogenously determined by the CG mechanisms investigated: there is no relationship between board size (including independent directors) and firm performance; CEO duality has a significantly negative effect on firm performance; concentration of ownership has a significantly positive influence on firm performance; managerial ownership is negatively correlated with firm performance; state ownership has a significantly positive effect on firm performance; and a supervisory board is positively correlated with firm performance. Practical implications The findings provide policymakers and firm managers with useful empirical guidance concerning CG in China. Originality/value Few integrative studies have examined the impact of CG structure on firm performance in China. This study adds new empirical evidence that the relation between CG structure and performance in China is endogenous and dynamic when controlling for unobserved heterogeneity, simultaneity, and dynamic endogeneity.

scholarly journals Corporate Governance Quality, Ownership Structure, Agency Costs and Firm Performance. Evidence from an Emerging Economy

2020 ◽  
Vol 13 (7) ◽  
pp. 154
Author(s):  
Haroon ur Rashid Khan ◽  
Waqas Bin Khidmat ◽  
Osama Al Hares ◽  
Naeem Muhammad ◽  
Kashif Saleem
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Agency Cost ◽  
State Ownership ◽  
Ownership Concentration ◽  
Listed Firms ◽  
Governance Quality ◽  
Corporate Governance Quality ◽  
The Relationship

The purpose of this paper is to investigate the effect of corporate governance quality and ownership structure on the relationship between the agency cost and firm performance. Both the fixed-effects model and a more robust dynamic panel generalized method of moment estimation are applied to Chinese A-listed firms for the years 2008 to 2016. The results show that the agency–performance relationship is positively moderated by (1) corporate governance quality, (2) ownership concentration, and (3) non-state ownership. State ownership has a negative effect on the agency–performance relationship. Various robust tests of an alternative measure of agency cost confirm our main conclusions. The analysis adds to the empirical literature on agency theory by providing useful insights into how corporate governance and ownership concentration can help mitigate agency–performance relationship. It also highlights the impact of ownership type on the relationship between agency cost and firm performance. Our study supports the literature that agency cost and firm performance are negatively related to the Chinese listed firms. The investors should keep in mind the proxies of agency cost while choosing a specific stock. Secondly; the abuse of managerial appropriation is higher in state-held firms as compared to non-state firms. Policymakers can use these results to devise the investor protection rules so that managerial appropriation can be minimized.

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