scholarly journals The Effect of ESG Activities on Financial Performance during the COVID-19 Pandemic—Evidence from Korea

2021 ◽  
Vol 13 (20) ◽  
pp. 11362
Author(s):  
Juhee Hwang ◽  
Hyuna Kim ◽  
Dongjin Jung
Keyword(s):  
Decision Making ◽  
Social Capital ◽  
Financial Performance ◽  
Market Uncertainty ◽  
Financial Outcomes ◽  
The Impact ◽  
Business Crisis

This study examines the effect of a firm’s environmental, social, and governance (ESG) activities on its financial performance during the acute uncertainty caused by the COVID-19 pandemic. Due to the COVID-19 pandemic, most Korean firms suffered unexpected difficulties in their business activities in early 2020, and their financial performance deteriorated significantly. The purpose of this study is to empirically analyze whether a firm’s ESG activities affect its financial performance during a business crisis. The results show that, in the first quarter of 2020, when the impact of the COVID-19 pandemic occurred, firms’ earnings dropped significantly; however, we found that the higher the performance of ESG activities, the smaller the decline in earnings. The results imply that, in an environment of uncertainty, the performance of a firm’s ESG activities is reflected in its financial outcomes. This result implies that trust and bond between firms and stakeholders, as formed through investments in social capital, are rewarded when the overall level of sustainability in markets is negatively impacted. In addition, our results suggest that the performance of nonfinancial activities is useful information for stakeholders’ decision making in relation to market uncertainty.

Examining the influence of expatriates’ social capital and knowledge-sharing behavior on financial performance

2019 ◽  
Vol 28 (3) ◽  
pp. 557-577 ◽  
Author(s):  
Wann Yih Wu ◽  
Li Yueh Lee ◽  
That Thi Pham
Keyword(s):  
Social Capital ◽  
Customer Satisfaction ◽  
Financial Performance ◽  
Knowledge Sharing ◽  
Balanced Scorecard ◽  
Organizational Support ◽  
Content Type ◽  
Moderation Effect ◽  
Internal Process ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of expatriate’s social capital and knowledge sharing on multinational companies’ (MNCs) financial performance, with a specific focus on the influence of trust, commitment, organizational support and the four elements of balanced scorecard (BSC). Design/methodology/approach A quantitative questionnaire survey was conducted using expatriates of MNCs in Taiwan as the respondents. Findings Trust and organizational support are significant predictors of knowledge sharing and social capital, which further facilitate their influence on learning and growth, customer satisfaction, internal process improvement and financial performance of MNCs. Besides, social capital serves as an accelerate agent to promote the influence of trust on knowledge sharing, and customer satisfaction serves as a catalyst on the influence of learning and growth and internal process on a firms’ financial performance. Practical implications This study provides a clear articulation of the role of knowledge sharing on the financial performance and its moderation effect on the elements of BSC. Trust and organizational support are essential for knowledge sharing and expatriates’ social capital. The roles of social capital and knowledge sharing are critical for expatriates to be success in the overseas market places. Originality/value Since the evidences regarding expatriate performance rarely integrate the variables of social capital, knowledge sharing and BSC into a more comprehensive framework, the results of this study can be an important reference for academicians to do further validation. These results are also critical for practitioners to develop dispatching policies for the expatriates in the oversea market places.

scholarly journals Corporate entrepreneurship and financial performance: The role of management

2002 ◽  
Vol 33 (4) ◽  
pp. 21-27 ◽  
Author(s):  
C. J. Goosen ◽  
T. J. De Coning ◽  
E. V.D.M. Smit
Keyword(s):  
Financial Performance ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Corporate Entrepreneurship ◽  
Industrial Sector ◽  
Key Factors ◽  
Financial Outcomes ◽  
Johannesburg Stock Exchange ◽  
The Impact

It is hypothesised that a positive relationship exists between the financial performance of an organisation and the level of intrapreneurship within the organisation with causation running from entrepreneurship to financial outcomes. Using a three-factor key intrapreneurship model developed by Goosen, De Coning and Smit (2002) and financial outcomes from a sample of companies listed in the industrial sector of the Johannesburg Stock Exchange, this proposition is put to the test. The results support the hypothesis that the key factors innovativeness, proactiveness and management’s internal influence all significantly contribute to financial performance if regarded individually, but that the last factor dominates the first two external factors when used simultaneously. The conclusion underscores the importance of the impact of leadership on financial outcomes.

Analytical capacity of financial statements against the backdrop of the COVID-19 pandemic

2020 ◽  
Vol 19 (10) ◽  
pp. 1794-1821 ◽  
Author(s):  
O.V. Efimova ◽  
O.V. Rozhnova
Keyword(s):  
Decision Making ◽  
Financial Performance ◽  
Financial Reporting ◽  
Business Strategy ◽  
Investment Decision ◽  
Financial Statements ◽  
Cash Flows ◽  
Foreign Companies ◽  
Investment Decision Making ◽  
The Impact

Subject. The paper explores the analytical capabilities of information disclosed in financial statements in the context of the COVID-19 pandemic. Objectives. The purpose is to identify the impact of the pandemic on financial statements and their analytical capabilities for investment decision-making. Methods. The study draws on methods of logical, statistical, comparative, and linguistic analysis. We analyze financial statements of Russian and foreign companies, paying special attention to the completeness of disclosed information on the impact of the pandemic on business and financial performance. We review annual financial statements for 2019, and interim reports for 2020. Results. We unveil the areas of disclosures that are most critical for the investment community and investment decision making, and vital for the analysis of financial performance and cash flows, given the unprecedented impact of the COVID-19 pandemic. The findings may be applicable to financial reporting preparation by economic entities in terms of disclosure on various forms of transformation and adaptation of businesses to the new crisis conditions; modernization of accounting rules at the level of external and internal standards in the direction of coordinating financial and non-financial reporting information; enhancement of analytical capacity of disclosures. Conclusions. The study confirms the scientific hypothesis that investors require detailed disclosure in all areas of the pandemic impact. To evaluate the going concern assumption and to forecast cash flows, users need disclosures on business strategy, the business model and its adaptability to the conditions of the new normality, sources of cash flow generation, and their use areas.

The impact of the gender composition of the Board of Directors on the company's performance: the experience of Germany, Austria and Switzerland

2021 ◽  
pp. 140-158
Author(s):  
Elena Makushina ◽  
Nikita Evsikov
Keyword(s):  
Financial Performance ◽  
Manufacturing Sector ◽  
Gender Composition ◽  
Financial Indicators ◽  
Female Representation ◽  
Financial Outcomes ◽  
The Board Of Directors ◽  
Negative Effect ◽  
Reverse Situation ◽  
The Impact

The article examines the changes in corporate governance bodies connected with financial performance dynamics in German, Austrian and Swiss companies. The main objective of the study is to trace the causal links between financial indicators and Board’s gender composition. The paper uses the reports of European companies to determine the Board composition and financial outcomes. Using a sample of 177 corporations and data on their Board and management composition along with financial performance indicators in 2014-2019, the authors apply regressions to determine statistically relevant relations between Board compositions and financial results. The findings show no negative effect of female representation in the Board on corporate financial performance. The study identifies a visible positive correlation between an increasing female representation in the Board and financial outcomes in real estate and manufacturing sector. Austria shows negative dependence of financial outcomes on increasing female representation in the Board, with a reverse situation in Switzerland. The results also show no correlation between the number of female directors and female managers.

The impact of bridging social capital in family firms' performance: exploring the mediation role of successor's social skills

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hedi Yezza ◽  
Didier Chabaud ◽  
Léo Paul Dana ◽  
Adnane Maalaoui
Keyword(s):  
Social Capital ◽  
Social Skills ◽  
Financial Performance ◽  
Family Firms ◽  
Sem Analysis ◽  
Content Type ◽  
Bridging Social Capital ◽  
One Year ◽  
The Impact

PurposeThis paper investigates the impact of bridging social capital on the financial and non-financial performance of family businesses and explores the mediation role of social skills in the context of family succession.Design/methodology/approachA quantitative study, through questionnaires, was conducted among 105 Tunisian family firms that have experienced a family succession for at least one year. The PLS-SEM analysis method was used to test the research hypothesis.FindingsResults show that an increase in external social capital is positively associated with financial performance and family-centred non-economic goals, whereas social skills mediate this positive relationship.Originality/valueThe proposed model aims to test the direct effect of bridging social capital on family firms' performance and exploring the mediation role of the successor's social skills.

Measuring customer experience management and its impact on financial performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Richard R. Klink ◽  
Jason Q. Zhang ◽  
Gerard A. Athaide
Keyword(s):  
Financial Performance ◽  
Customer Experience ◽  
Equation Modeling ◽  
Outcome Variable ◽  
Content Type ◽  
Financial Outcomes ◽  
Customer Experience Management ◽  
Main Effect ◽  
Market Turbulence ◽  
The Impact

Purpose With the considerable attention given to customer experience (CX) today, customer experience management (CXM) has been touted as one of the most promising management approaches for organizations. The purpose of this paper is threefold: develop a scale to measure the CXM construct, investigate the financial outcomes of CXM and assess the impact of moderator variables (e.g. market turbulence) on these financial outcomes while accounting for the effects of control variables (e.g. firm size). Design/methodology/approach The study involves a survey of 233 firms (across 10 industries) involved in CXM. Confirmatory factor analysis (CFA), structural equation modeling (SEM), instrumental variables and moderated regression analyzes are used to test four hypotheses. Findings The results support treating CXM as a second-order construct comprising three dimensions: cultural mindset toward CXs, strategic directions for designing CXs and firm capabilities of continually renewing CXs. Furthermore, CXM is positively related to financial performance; this effect increases as market turbulence, competitive intensity and technological turbulence increases. Research limitations/implications With our CXM measure, future research can advance CXM theory by examining other outcome variables (e.g. employee satisfaction) and moderators (e.g. culture), as well as introduce antecedents to CXM (e.g. company heritage). Limitations include the concerns normally associated with using self-reported measures of performance, convenience samples and cross-sectional designs. Practical implications This research provides managerial prescriptions of when to invest in CXM initiatives to enhance financial performance. It also provides managers a CXM diagnostic to help assess their level of CXM maturity. Originality/value This paper develops CXM theory by advancing a measure of the CXM construct, relating the construct to an outcome variable (main effect) and introducing moderating variables to shed light on the generalizability of the main effect.

Entrepreneurial decision-making and family social capital

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cizhi Wang ◽  
Giulia Flamini ◽  
Kai Wang ◽  
Rong Pei ◽  
Chiyin Chen
Keyword(s):  
Decision Making ◽  
Social Capital ◽  
Family Firms ◽  
Family Members ◽  
Chinese Family ◽  
Content Type ◽  
Family Social Capital ◽  
The Family ◽  
Entrepreneurial Decision ◽  
The Impact

PurposeThe purpose of this paper is to adopt a collective perspective in the study of entrepreneurial decision-making processes and empirically analyse the ways in which social relationships between family members can shape their collective entrepreneurial decision-making behaviour (ED).Design/methodology/approachThis paper considers the family social capital (FSC) in inducing overall conformity to the focal family member's decision to exploit an opportunity. In terms of the seminal construct of social capital, the authors propose three FSC dimensions that can be used to induce conformity: structural, relational and cognitive dimensions. Then, the authors design questionnaires to collect data pertaining to the relationships between the family members' ED and the FSC. Finally, the authors collect 152 valid questionnaires from Chinese family firms.FindingsThe data analysis consists of two parts. The first section of this paper analyses conformity by testing the discriminant validity of models. Regression analysis is then used to test the relationship between family members' ED and the FSC. Significant relationships between the cognitive dimension of FSC and the entrepreneur's decision-making are found.Originality/valueThe research contributes towards academic literature concerning both entrepreneurship and social capital. On the one hand, this paper is one of the rare pieces of entrepreneurial research that responds to the call for the study of entrepreneurship from a collective perspective. On the other hand, our study quantitatively tests the impact of FSC at a multidimensional level. It provides conclusions regarding the social influence of other family members and provides insights into social capital by studying entrepreneurship from a social/community perspective.

Evaluating financial performance in local government: maximizing the benchmarking value

2009 ◽  
Vol 75 (1) ◽  
pp. 151-167 ◽  
Author(s):  
José Luis Zafra-Gómez ◽  
Antonio Manuel López-Hernández ◽  
Agustín Hernández-Bastida
Keyword(s):  
Decision Making ◽  
Public Sector ◽  
Local Government ◽  
Financial Performance ◽  
Economic Factors ◽  
Financial Condition ◽  
Factors Influencing ◽  
The Social ◽  
Public Sector Managers ◽  
The Impact

One of the main problems in evaluating financial performance arises in carrying out comparisons between municipalities, as no account is taken of the impact of certain factors of the social and economic environment on the indicators in question. In this study, the concept of financial condition is applied, revealing the influence of such factors, and a methodology is proposed to minimize their effects on the results of the evaluation. The results of applying these to a sample of municipalities in Spain reveal that the model is useful for reinforcing the value of benchmarking between municipalities with similar characteristics. Points for practitioners The use of indicators for evaluating financial performance has advanced considerably in recent years. However, many criticisms have been made by public sector managers concerning the application of such indicators. One of these is that, in many cases, the values measured by different authorities are not comparable, as the services they provide differ significantly. If local authorities were grouped according to the social and economic factors influencing their provision of public services, the evaluations made would be much more effective, facilitating decision-making by supervisory bodies and by municipal managers.

scholarly journals ESG Versus Corporate Financial Performance: Evidence from East Asian Firms in the Industrials Sector

2021 ◽  
Vol 39 (3) ◽  
Author(s):  
Viviane Naimy ◽  
Rim El Khoury ◽  
Sahar Iskandar
Keyword(s):  
Financial Performance ◽  
Cross Sections ◽  
Stock Return ◽  
East Asian ◽  
Corporate Financial Performance ◽  
Transportation Industry ◽  
Return On Equity ◽  
Financial Outcomes ◽  
Listed Firms ◽  
The Impact

Given the unsettled ESG-CFP (Environmental, Social, Governance-Corporate Financial Performance) relationship and the scarcity of research covering emerging markets firms and the impact of each of the ESG pillars on CFP while considering the industry sector categories, this paper is pioneer in investigating this relationship for 108 East Asian listed firms operating in the Industrials sector for the period extending from 2011 to 2017. The overall ESG scores together with their components are used to study their impact on CFP while considering accounting (Return on Assets (ROA) and Return on Equity (ROE)), and market measures (Stock Return (RET) and Price-to-Book ratio (PB)). We used panel corrected standard errors to address contemporaneous cross-correlations related to the panel cross-sections. Our findings showed that the ESG-CFP relationship depends on the ESG pillars, the type of CFP measures, and the industry nature. No relationship was detected between ESG and CFP when proxied by accounting measures while a concave relationship with Stock Return and a convex relationship with Price-to-Book ratio were revealed. When ESG pillars were considered separately, a convex relationship was obtained between Environmental and accounting performances and between Governance and Price-to-Book ratio while a concave relationship was depicted between Social and accounting performances. At the industry level, ESG negatively impacted the market performance in the Transportation industry compared to no impact in the Capital Goods industry. Consequently, ESG investment decisions in East Asian firms must be well calibrated and planned out to avoid undesired financial outcomes, while a shift in the mindset of managers toward a better ESG development is necessary to attain short-term gains and sustainable fiscal and social advantages.

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