Fulfillment of ESG Responsibilities and Firm Performance: A Zero-Sum Game or Mutually Beneficial

Focusing on the 311 Chinese firms listed in the global markets from 2008 to 2019, based on the trade-off theory and the resource slack theory, using panel vector autoregressive model and panel threshold model, this paper explores the impact of fulfilling ESG responsibility on firm performance. The study reveals that in the short run, fulfilling ESG responsibility presents a “Substitution Effect,” whereas, in the long run, it presents a “Promotional Effect.” On the other hand, the improvement of firm performance has a significantly positive impact on ESG fulfillment investment, even though there is a strong hysteresis effect. Significant heterogeneity exists regarding the relationship between ESG fulfillment and firm performance. ESG fulfillment has a negative impact on firm performance in the short run, with the most affected firms being those small and mid-sized firms listed in the Mainland China markets. In the near term, the impact of firm performance on ESG fulfillment is positive, with those listed in the overseas markets and large firms being affected the most. The study reveals that firm size and the factors affiliated with ESG fulfillment tend to cause the differentiation effect in the inhibitory influence of ESG fulfillment on firm performance in the short run. This study could be used as a guideline for the social responsibilities of nonprofit organizations.

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

The Economic Journal ◽

10.1093/ej/uez012 ◽

2019 ◽

Vol 129 (622) ◽

pp. 2390-2423 ◽

Cited By ~ 13

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.

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The Impact of Financial Structure Towards Performance of Non-Financial Companies Listed on Amman Stock Exchange

Management and Accounting Review (MAR) ◽

10.24191/mar.v20i01-04 ◽

2021 ◽

Vol 20 (1) ◽

pp. 61-83

Author(s):

Laith Fouad Alshouha ◽

◽

Wan Nur Syahida Wan Ismail ◽

Mohd Zulkifli Mokhtar ◽

Nik Mohd Norfadzilah Nik Mohd Rashid ◽

...

Keyword(s):

Firm Performance ◽

Negative Impact ◽

Positive Impact ◽

Stock Exchange ◽

Financial Structure ◽

Managerial Ownership ◽

Data Set ◽

Amman Stock Exchange ◽

The Impact ◽

The Relationship

The purpose of the current study was to investigate the relationship between financial structure towards the financial performance of companies listed on Amman stock exchange (ASE) as one of the emerging economies. This paper adopted a panel data set of 88 non-financial companies listed on the ASE over a period of 10 years from 2009 to 2018. According to empirical results that there is significant evidence to support the fact that debt repaying ability (DRAB), managerial ownership (MANOW), and foreign ownership (FOROW) are positively related to firm performance. Otherwise, the findings revealed no evidence to support the impact of the financial structure ability (FSA) towards firm performance. Moreover, the findings support the fact that firm size (SIZ) has a positive impact on firm performance of companies listed on the ASE. On the other hand, (AGE) has a negative impact on firm performance, while (GROWTH) has no impact on firm performance. The current study encourages managers to maintain a good percentage of debt repaying ability and owners to grant shares as managers’ incentives, and also to attract foreign investors. Future studies, should try applying the current study on the financial sector.

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Institutional change of compensation policy and its impact on CEO turnover and firm performance

Review of Managerial Science ◽

10.1007/s11846-021-00507-3 ◽

2021 ◽

Author(s):

Chenli Yin ◽

Dan Li ◽

Maria Paz Salmador

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Negative Impact ◽

Positive Impact ◽

Critical Role ◽

Ceo Turnover ◽

Policy Adoption ◽

Institutional Changes ◽

Compensation Policy ◽

The Impact

AbstractThe existing corporate governance literature has mostly focused on micro-level studies of executive compensation, with limited attention paid to influential macro-level factors such as institutions and institutional changes and their impacts on corporate governance and performance. The implementation of the new compensation policy that restricts CEO compensation ceiling in state-owned firms in China offers an ideal context for us to study how institutional changes and firms’ adoption of these changes can influence CEO turnover and firm performance. Our empirical analyses reveal that the positive impact of new compensation policy adoption on CEO turnover is stronger for CEOs with originally higher compensation. The impact of new compensation policy adoption on firm performance, however, is negative, and the negative impact is contingent upon a firm’s market share and tech intensity. Our research contributes to the literature on corporate governance by theorizing and empirically demonstrating the critical role that institutions play in corporate governance.

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Female Directors, Family Ownership and Firm Performance in Jordan

International Journal of Financial Research ◽

10.5430/ijfr.v11n1p206 ◽

2019 ◽

Vol 11 (1) ◽

pp. 206 ◽

Cited By ~ 1

Author(s):

Zaid Saidat ◽

Claire Seaman ◽

Mauricio Silva ◽

Lara Al-Haddad ◽

Zyad Marashdeh

Keyword(s):

Firm Performance ◽

Financial Performance ◽

Family Firms ◽

Negative Impact ◽

Positive Impact ◽

Stock Exchange ◽

Least Square ◽

Public Firms ◽

Female Directors ◽

The Impact

This study examines the impact of female directors on the financial performance of family and non-family Jordanian firms. A sample of 103 Jordanian public firms listed on Amman Stock Exchange for the time period 2009-2015 was selected. The study had a quantitative approach and used a panel data methodology. The data analysis was conducted using Ordinary Least Square Regression. ROA and Tobin’s Q were deployed as measurement of financial performance. The appointment of female directors does not have any significant impact on the financial performance of family firms. However, with regard to non-family firms, female directors appeared to have a negative impact on the performance of these firms. The impact of female directors on family firm performance merits further research in the context of different countries and cultures. Appointments based on qualifications and expertise is more likely to have a positive impact. Jordan is an under-researched area where the impact of female directors on the firm performance would merit further research. Differentiating between the impact of female directors on family and non-family firms would also merit further research, especially in the context of the conditions under which they are appointed.

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The Effect of IAS-24 Disclosures on Governance Mechanisms and Ownership Structures in Pakistan

Lahore Journal of Business ◽

10.35536/ljb.2016.v5.i1.a2 ◽

2016 ◽

Vol 5 (1) ◽

pp. 15-36

Author(s):

Abdul Rafay Abdul Rafay ◽

Ramla Sadiq ◽

Mobeen Ajmal

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Financial Reporting ◽

Negative Impact ◽

Positive Impact ◽

Stock Exchange ◽

Institutional Ownership ◽

Governance Mechanisms ◽

Ownership Structures ◽

The Impact

IAS-24 of the International Financial Reporting Standards focuses on the concept and disclosures of related party transactions (RPTs) for a reporting entity. This study examines the interrelationship between RPTs (as disclosed under IAS-24), agency theory, ownership structures and firm performance. Our sample includes nonfinancial companies indexed by the KSE-100 of the Pakistan Stock Exchange during 2006–15. To run the regression models, we determine the regression assumptions, normality, heteroskedasticity, autocorrelation and multicollinearity. We investigate the impact of different RPTs, including cash inflows and outflows, whereas other studies generally look at the impact of RPTs on firm performance in totality. The empirical analysis suggests that institutional ownership has a positive, significant impact on firm performance. Related party purchases have a significant, negative impact on performance, resulting in the expropriation of institutional ownership. RPTs that generate revenues have a significant, positive impact on performance, such that institutional ownership has a propping-up effect with respect to the related parties. In practice, institutional ownership leads to strong corporate governance and contributes to firm performance. While other studies find family ownership responsible for the expropriation effect, we argue that institutional ownership has a propping-up and expropriation effect on related parties. Our study also suggests that certain ownership structures lead to weaker corporate governance mechanisms, resulting in greater agency problems. This, in turn, badly affects company performance and leads to the exploitation of minority shareholders.

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Fragility of State in Central African Republic: An Econometric Approach to Efficiency Understanding

Global Business Review ◽

10.1177/0972150918779291 ◽

2018 ◽

Vol 21 (3) ◽

pp. 681-697

Author(s):

Yapatake Kossele Thales Pacific

Keyword(s):

Central African Republic ◽

Negative Impact ◽

Positive Impact ◽

The State ◽

Policy Implications ◽

Long Run ◽

Short Run ◽

High Level ◽

The Impact ◽

Control Of Corruption

A fragile state contributes to the underdevelopment of the nation and its consequences can be very devastating on the state’s cohesion, characterized by a high level of corruption which led the country to an incessant political instability and the continuous presence of foreign troops. 1 This article used the vector autoregresssion (VAR) model covering the period of 2005–2015 to examine the impact of control of corruption on the fragility of the state in the Central African Republic (CAR). The results show that control of corruption is significant and has a negative impact on the fragility of the state in the short run. The impulse response shows a negative impact of control of corruption in the short run but a positive impact in the long run on the fragility of the state. The policy implications of this fragility are that the CAR must pursue better governance as well as in the investment choices. Unless the CAR leaders and citizens recognize their own fragility, things can only get worse.

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Oil Price, Oil Price Implied Volatility (OVX) and Illiquidity Premiums in the US: (A)symmetry and the Impact of Macroeconomic Factors

Journal of Risk and Financial Management ◽

10.3390/jrfm13040070 ◽

2020 ◽

Vol 13 (4) ◽

pp. 70

Author(s):

Mohammad Sharik Essa ◽

Evangelos Giouvris

Keyword(s):

Implied Volatility ◽

Negative Impact ◽

Positive Impact ◽

Oil Price ◽

Macroeconomic Factors ◽

Full Sample ◽

Crisis Period ◽

The Us ◽

Short Run ◽

The Impact

We examine the impact of oil price and oil price volatility on US illiquidity premiums (return on illiquid-minus-liquid stocks), using the US Oil Fund options implied volatility OVX index. We use daily data from 2007 to 2018, taking into account the structural break in June 2009 and controlling for macroeconomic factors. Both OLS and VAR models indicate that oil price has a significantly positive impact and OVX has a significantly negative impact on premiums, for the full sample and post-crisis period. These relationships are potentially driven by investor sentiments and market liquidity. Oil price has a negative impact on premiums during the crisis period. Using an autoregressive distribution lag model and an error correction model, we analyse long- and short-run elasticities. We find that oil price has a significantly positive impact on premiums both in the long- and short-run, for the full sample and post-crisis period. OVX only has a significantly negative impact in the short-run for the full sample. The reverting mechanism to establish long-run equilibrium is effective for the full sample and post-crisis period. Illiquidity premiums do not show any asymmetric responses to oil price changes but we do find evidence of asymmetric response to OVX changes.

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Influence of Different Industrial Agglomeration Modes on Eco-Efficiency in China

International Journal of Environmental Research and Public Health ◽

10.3390/ijerph182413139 ◽

2021 ◽

Vol 18 (24) ◽

pp. 13139

Author(s):

Xiaohu Li ◽

Xigang Zhu ◽

Jianshu Li ◽

Chao Gu

Keyword(s):

Spatial Organization ◽

Negative Impact ◽

Positive Impact ◽

Threshold Model ◽

City Size ◽

Medium Size ◽

Chinese Government ◽

Industrial Agglomeration ◽

The Impact ◽

The City

It is a key issue for the Chinese government to improve eco-efficiency and realize green development. As a spatial organization mode of industrial labor division, industrial agglomeration has a complex impact on eco-efficiency. However, it is still debatable which industrial agglomeration modes have a positive impact on eco-efficiency. This paper employs a panel threshold model, enterprise micro-level data, and relevant economic environment data from 283 cities in China from 2004 to 2012. It tests the nonlinear effects of specialized, related diversified, and unrelated diversified agglomeration on industrial eco-efficiency. The results show that the impact of specialized and related diversified agglomeration on industrial eco-efficiency is first inhibited and then promoted. The unrelated diversified agglomeration has a significantly negative impact on industrial eco-efficiency, but the negative impact weakens when agglomeration reaches a certain level. Furthermore, the impact of the three agglomeration modes on industrial eco-efficiency depends on city size. The impact of specialized agglomeration on industrial eco-efficiency is insignificant in small- and some medium-sized cities, but it has a significant inhibitory effect on industrial eco-efficiency when the city surpasses medium size. The role of related diversified agglomeration in promoting industrial eco-efficiency is further enhanced with the growth of city size. The impact of unrelated diversified agglomeration on industrial eco-efficiency gradually changes from negative to positive, but it plays a promoting role only when the city reaches the scale of super-large and mega-cities. Finally, this paper suggests that policymakers should formulate differentiated agglomeration policies according to changes in industrial agglomeration level or city size to improve industrial eco-efficiency.

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The Impact of Environmental Regulations, Corruption and Economic Freedom on Economic Growth: Empirical Evidence from China

International Journal of Economics and Finance ◽

10.5539/ijef.v9n11p92 ◽

2017 ◽

Vol 9 (11) ◽

pp. 92 ◽

Cited By ~ 2

Author(s):

Najla Shariff Omar Al Baiti ◽

Navaz Naghavi ◽

Benjamin Chan Yin Fah

Keyword(s):

Economic Growth ◽

Economic Freedom ◽

Quantitative Methods ◽

Negative Impact ◽

Positive Impact ◽

Environmental Regulations ◽

Unit Root Test ◽

Long Run ◽

Short Run ◽

The Impact

The purpose of this study is to investigate the impact of environmental regulations, corruption and economic freedom on economic growth in China. Different indices were used as measurements of the variables; Environmental Policy Stringency Index, Control of Corruption Index and Economic Freedom of the World Index. The study uses quantitative methods to empirically determine which factors play a role in China’s progressive economic growth rates. Unit root test, Johansen cointegration and the Autoregressive Distributed Lag (ARDL) modelling were applied to examine the short and long run correlations. Results indicated that there is in fact a correlation between environmental regulations, corruption, economic freedom and economic growth. Long run coefficients demonstrated that environmental regulations had a negative impact on economic growth, while corruption and economic freedom displayed positive results. However, short run coefficients showed that environmental regulation is insignificant in the short run, corruption maintains a positive impact and economic freedom negatively effects economic growth in the short run.

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

Journal of Financial Engineering ◽

10.1142/s2345768614500275 ◽

2014 ◽

Vol 01 (03) ◽

pp. 1450027 ◽

Cited By ~ 2

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.

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