scholarly journals Impact of Corporate Environmental Responsibility on Firm’s Financial Performance: Moderating Role of Organizational Slack and Industry Competition

2022 ◽  
Vol 8 (2) ◽  
pp. 76-92
Author(s):  
Muhammad Amir ◽  
Naveed Iqbal ◽  
Sheeza Tahir
Keyword(s):  
Financial Performance ◽  
Moderating Effect ◽  
Annual Reports ◽  
Environmental Responsibility ◽  
Corporate Financial Performance ◽  
Organizational Slack ◽  
Corporate Environmental Responsibility ◽  
Industry Competition ◽  
Data Validity

Due to speedy trade and industry expansion in the emerging economies it is creating stern environmental corrosion. Effluence makers’ enterprises are mostly responsible for environmental deterioration. Therefore, it is the responsibility of those firms to take steps to control this corrosion in the environment. This research explains the effect of corporate environmental responsibility (CER) on corporate financial performance (CFP) with the moderating effect of organizational slack and industry competition. Data was collected from annual reports of 50 KSE 100 index companies from 2012-2019, containing total 450 observations. Dynamic penal model was used to test the study hypothesis by using Eviews, different pre and post estimations are applied to confirm the data validity.  Empirical results indicate that corporate environmental responsibility has significant positive effect on corporate financial performance, while the moderating effect of organizational slack is negative. Industry competition has significant positive moderating effect on the relationship, i.e., if there is high competition in industry then firms will invest more in environment to attract more consumers and to create good will in market. The study reveal that those firms will lead where competition is high and who will focus on their responsibility towards environment.

scholarly journals MINING RISK-RELATED SENTIMENT IN CORPORATE ANNUAL REPORTS AND ITS EFFECT ON FINANCIAL PERFORMANCE

2020 ◽  
Vol 26 (6) ◽  
pp. 1422-1443
Author(s):  
Renáta Myšková ◽  
Petr Hájek
Keyword(s):  
Financial Performance ◽  
Financial Risk ◽  
Positive Impact ◽  
Early Warning Systems ◽  
Annual Reports ◽  
Corporate Financial Performance ◽  
Managerial Communication ◽  
Word Lists ◽  
Corporate Annual Reports

Models that predict corporate financial risk are important early-warning systems for corporate stakeholders. Most models to date have been developed using financial indicators. However, in financial decision-making, increasing attention is being paid to the role of textual information, which may provide additional insight into managerial opinions and intentions and which has recently been used to more effectively predict corporate financial performance. Previous approaches in this regard have predominantly focused on sentiment analysis of managerial communication. However, the role of context-related sentiment remains poorly understood in the financial risk domain. Here, we investigate how risk-related sentiment in verbal managerial communication might predict corporate financial performance, including indebtedness, profitability, market value and bankruptcy risk. To ensure deductive content validity, we propose specific word lists for each type of corporate financial risk and assign each word with positive / negative labels. Our findings provide evidence for a major role of risk-related sentiment as an indicator of corporate performance in terms of financial risks. Notably, using novel risk-related word lists in regression models, we show that a proactive and opportunity-seeking risk management has a significantly positive impact on financial performance, implying that stakeholders should carefully consider the risk-related managerial communication in corporate annual reports.

Does structural capital count in human capital-corporate financial performance relationship? Evidence from deposit money banks in Nigeria

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nnachi Egwu Onuoha
Keyword(s):  
Human Capital ◽  
Financial Performance ◽  
Annual Reports ◽  
Corporate Financial Performance ◽  
Significant Positive Effect ◽  
Content Type ◽  
Mediating Role ◽  
Structural Capital ◽  
Positive Effect

Purpose The purpose of this paper is to explore human capital and corporate financial performance link from the perspective of human capital theory, resources-based view and balanced score card approach, and the mediating role of structural capital in this relationship. Design/methodology/approach Overall, a data set was drawn from five-year annual reports of deposit money banks (DMBs) in Nigeria. Additionally, the bootstrap procedure was performed to test the mediating role of structural capital. Findings Specifically, the paper results indicate that whereas human capital has significant positive effect on corporate financial performance and structural capital, structural capital has significant positive effect on corporate financial performance. Additionally, the study finds structural capital to mediate the effect of human capital on organizational financial performance. Research limitations/implications This paper focused on 12 DMBs in Nigeria and their five year annual reports. Accordingly, future studies in this area should increase the number of banks and years, and include firms operating in insurance, manufacturing, telecommunication and oil and gas industries to permit comparability of results and broader basis for generalizability. Moreover, the study results provide insights that would serve as robust empirical basis for policy makers to insist on enhancement of the value of human and structural capital variables. Practical implications The managers of DMBs should commit to development of their employees through improvement in their training and health programs, among others. Also, they should ensure continuous improvement of their structural capital to enable the investments in their employee to translate to enhanced corporate financial performance. Originality/value To the best of the author’s knowledge, this is the first study to explore the mediation effect of structural capital on the human capital-corporate financial performance link using evidence from DMBs in Nigeria and, thus, extends and deepens extant literature on human capital-organizational performance nexus.

scholarly journals The Effects of Managerial Competency and Local Religiosity on Corporate Environmental Responsibility

2021 ◽  
Vol 13 (11) ◽  
pp. 5857
Author(s):  
Chuluunbat Tsendsuren ◽  
Prayag Lal Yadav ◽  
Sangsoo Kim ◽  
Seung-Hun Han
Keyword(s):  
Risk Taking ◽  
Environmental Responsibility ◽  
Corporate Environmental Responsibility ◽  
Negative Effects ◽  
Publicly Traded ◽  
Environmental Practices ◽  
Corporate Behavior ◽  
Environmental Engagement ◽  
Managerial Competency

This study investigates the influence of local religious beliefs to evaluate managerial motives towards corporate environmental engagement, considering the growing attention of the role of external factors in shaping corporate behavior. Using Newsweek’s green rankings of the largest publicly traded US firms by market capitalization from 2014–2016, we find that competent managers show a higher strategic preference for corporate environmental practices in firms located in low-Protestant or high-Catholic areas exhibiting higher risk and uncertainty, which tend to mitigate the negative effects of risky environments. We find that corporate environmental practices positively influence the sales of firms in high risk-taking states. This study provides significant contributions to the literature documenting the consequences of local religious risk-taking behavior and elaborates on the perceptions of competent managers on environmental management. The results provide valuable insights for practitioners and policymakers looking to incorporate environmental practices.

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